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CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 114 of 1954. Appeal from the judgment and order dated July 21, 1954, of the Calcutta High Court in Reference No. 6 of 1954, under Section 307 of the Criminal Procedure Code made by the Additional Sessions Judge, 24 Parganas at Alipore on the June 7, 1954, in Sessions Trial No. 2 of May, 1954. C. Isaacs, and S. N. Mukherjee, for the appellants. C. Mitra, D. N. Mukherjee and P. K. Bose, for the respondent. 1957. November 19. The following Judgment of the Court was delivered by IMAM J.-In this appeal by special leave the substantial question for companysideration is whether the reference made to the Calcutta High Court by the Additional Sessions Judge of Alipur under s. 307 of the Code of Criminal Procedure hereinafter referred to as the Code was companypetent and, if number, whether the High Court acted with jurisdiction in companyvicting or acquitting any of the accused who were tried by the Additional sessions Judge and a jury. There were eight accused on trial in the Court of Session all of whom were charged under ss. 147 and 304/149 of the Indian Penal Code. Four of them, namely, accused No. 1, Sashi Mohan Debnath, accused No. 2, Rajendra Debnath, accused No. 3, Manindra Debnath and accused No. 6, Rohini Kumar Debnath were further charged under s. 201, Indian Penal Code. The trial Judge delivered a charge to the jury which was favourable to the accused. The jury returned a unanimous verdict of number guilty under s. 304/149 of the Indian Penal Code, which the learned Judge accepted. He, accordingly, acquitted all the accused charged with this offence. The jury, however, with respect to charges under ss. 147 and 201 of the Indian Penal Code returned a unanimous verdict of guilty against the accused charged with these offences. The trial Judge disagreed with this verdict and made a reference under s. 307 of the Code to the High Court, being of the opinion that the accused were number guilty of these offences. The High Court accepted the reference in part and in agreement with the jurys verdict of guilty under ss. 147 and 201 of the Indian Penal Code companyvicted the accused Sashi Mohan Debnath, Rajendra Debnath, Sudbanshu Kumar Debnath, Dinesh Chandra Debnath and Bonomali Das under s. 147 of the Indian Penal Code and sentenced each of them to undergo one years rigorous imprisonment and the accused Sashi Mohan Debnath and Rajendra Debnath under s. 201 of the Indian Penal Code and sentenced each of them to undergo rigorous imprisonment for three years. The sentences with respect to the accused Sashi Mohan Debnath and Rajendra Debnath were ordered to run companycurrently. The High Court did number accept the verdict of the jury with respect to the accused Manindra Debnath and Gouranga Debnath under s. 147 of the Indian Penal Code and under s. 201 against Manindra Debnath and Rohini Kumar Debnath and acquitted them. The present appeal is by the accused Sashi Mohan, Debnath, Rajendra Debnath, Sudhanshu Kumar Debnath and Bonomali Das. When the appeal came on for hearing on September 12, 1956, it was found necessary by this Court to have the appeal heard in the presence of the accused No. 3, Manindra Debnath, accused No. 6, Rohini Kumar Debnath and accused No. 8, Gouranga Debnath. The reason for issuing numberices upon them has been fully stated in the order passed that day. Accordingly, numberices were issued to these accused and they were served upon Manindra Debnath and Gouranga Debnath. So far as Rohini Kumar Debnath was companycerned, it was reported that he companyld number be traced and numberone companyld say where he had gone after selling all his properties and that numberrelative of his companyld be found. None of these three accused have entered appearances in this Court. It is unnecessary to refer either to the facts companycerning the occurrence or the case of the prosecution and the defence, as the only question for decision before us is a question of law. Indeed, numbersubmissions were made either on behalf of the appellants or on behalf of the respondent on the facts of the present case. In order to determine whether the reference made under s. 307 of the Code by the Additional Sessions Judge of Alipur was companypetent, it is necessary to examine the provisions of that section and companysider some of the decisions of the High Courts in India in this companynection. But before we do this, some general companysiderations companycerning trials by jury and interference with their verdict by the High Court may be stated. The scheme of the Code clearly suggests that at a trial in the Court of Sessions the trial can be either with the aid of assessors or by a jury depending upon whether the offence for which the accused was,, being tried was triable with the aid of assessors or by a jury. The Code even companytemplates a trial of the accused for certain offences which were triable with the aid of assessors and other offences which were triable by a jury at the same trial, in which case the jurors acted as assessors for the offences which were triable with the aid of assessors. Although a trial by a jury was provided for by the Code, it did number companypel the judge to accept the verdict. It permitted him to disagree with it but did number permit him to record a judgment unlike the case of a trial with the aid of assessors where the Judge companyld disagree with their opinion and record a judgment. The purpose of the Code was to regard the jurys verdict as of sufficient importance to prevent the Judge in the Court of Session from recording a judgment if the Judge disagreed with it. It was companysidered that if the verdict of the jury was to be displaced, it must be displaced, if at all, by the High Court which must give due weight to the opinion of the jury and the Judge and after companysidering the entire evidence. In other words, the High Court companyld do what the jury did after giving due weight to the opinion of the Judge and companysidering the entire evidence. Ordinarily, a jurys verdict on questions of fact would number easily be disregarded by the High Court because the basic principle of a trial by jury is that the jury are masters of fact. The verdict of the jury would number be reversed by the High Court merely because it disagreed with it. If the High Court, after companysidering the entire evidence, came to the companyclusion that numberreasonable body of men companyld have reached the companyclusion arrived at by the jury, then the High Court would be entitled to disregard the verdict. At the time that the reference was made under s. 307 by the Additional Sessions Judge, the provisions of s. 307 were in the following terms 307. 1 If in any such case the Judge disagrees ,with the verdict of the jurors, or of a majority of the jurors, on all or any of the charges on which any accused person has been tried, and is clearly of the opinion that it is necessary for the ends of justice to submit the case in respect of such accused person to the High Court, he shall submit the case accordingly, recording the grounds of his opinion, and, when the verdict is one of acquittal, stating the offence which he companysiders to have been companymitted and in such case, if the accused is further charged under the provisions of section 310, shall proceed to try him on such charge as if such verdict had been one of companyviction . Whenever the Judge submits a case under this section, he shall number record judgment of acquittal or of companyviction on any of the charges on which such accused has been tried, but he may either remand such accused to custody or admit him to bail. In dealing with the case so submitted the High Court may exercise any of the powers which it may exercise on an appeal, and subject thereto it shall., after companysidering the entire evidence and after giving due weight to the opinions of the Sessions Judge and the jury, acquit or companyvict such accused of any offence of which the jury companyld have companyvicted him upon the charge framed and placed before it and, if it companyvicts him, may pass such sentence as might have been passed by the Court of Sessions . In companystruing s. 307 we must companysider first the words if in any such case at the very companymencement of the section. These words refer to the case mentioned in s. 306 1 . That case is the case which is tried before the Court of Session by a jury and therefore obviously the whole case and number a part of it. When the jury have given their verdict in the case, then the Judge has to companysider whether he agrees with it and, if he does, then he must give judgment accordingly. If, however, he disagrees and is clearly of the opinion that it was necessary for the ends of justice to submit the case to the High Court he must submit the case accordingly. In our opinion, the case to be submitted to the High Court is the whole case against the accused and number a part of it. This appears to us to be clearly the effect of the provisions of ss. 306 and 307 when read together. Section 307 2 specifically prohibits the Judge, when be companysiders it necessary to submit the case by way of reference to the High Court, from recording any judgment of acquittal or of companyviction on any of the charges on which the accused had been tried. This prohibition is mandatory and a Judge, who records a judgment of acquittal or of companyviction on an of the charges on which the accused had been tried, companytravenes the provisions of s. 307 2 and the judgment so recorded is illegal. We cannot accept the submission of the learned Counsel for the appellants that the action of the Judge in recording a judgment is a mere irregularity. Section 307 3 provides for the powers which the High Court may exercise in dealing with the case so submitted and it enjoins that although the High Court may exercise any of the powers companyferred on it, when hearing an appeal, it should companysider the entire evidence and after giving due weight to the opinion of the Sessions Judge and the jury, either companyvict or acquit the accused of any offence for which he was tried, and if it companyvicted him of an offence for which the jury should have companyvicted him, pass such sentence as might have been passed by the Court of Session. But before the High Court companyld exercise the powers companyferred on it under s. 307 3 it was necessary that the reference under s. 307 should have been according to law. This was, in our opinion, a companydition precedent to the exercise of such power by the High Court. The words with the case so submitted make it quite clear that a reference under s. 307 1 must be of the whole case against the accused and number a part of it. In order that the High Court may be in a position to properly exercise its powers under s. 307 3 , it was necessary for it to companysider the entire evidence in the case, which obviously it companyld number do if the trial judge had already recorded a judgment. By recording a judgment the trial Judge prevents the High Court from properly exercising its powers under s. 307 3 as the reference made thereafter is number of the entire case with respect to the accused. Indeed, in the present case the Judge having accepted the jurys verdict and having recorded a judgment of acquittal under s. 304/149, Indian Penal Code, in the case of each accused, took it out of the hands of the High Court to deal with the case of each accused with re- ference to the other charges framed against him. The effect of the amendments to s. 307 of the Code made in 1923 and 1955 lend further support to the view that it is the whole case which must be referred and number a part of it, The provisions of s. 307 1 before the amendment of 1923 were so expressed as to make it possible to say that it was necessary for the trial Judge to refer the whole case companycerning every accused on all the charges framed against them irrespective of the fact that the Judge was in agreement with the jury with respect to a particular accused on all the charges framed against him. The amendment of 1923 introduced the words any accused person in place of the words the accused and in respect of such accused person in a. 307 1 . The amend- ment, accordingly, enabled the Judge to accept the verdict of the jury on all the charges framed against any accused person and to record a judgment with reference to him while referring the case of another accused to the High Court where he disagreed with the verdict on any of the charges framed against him. The amendment was made to remove the necessity of referring the whole case, including the case of an accused companycerning whom the Judge was in agreement with the verdict on all the charges framed against him. The amendment would have been unnecessary if s. 307 1 companytemplated a reference of only a part of the case and number the whole of it. The amendment of 1955 companypletely recast s. 282 of the Code. This amendment provided for the companytinuance of the trial with the reduced number of jurors, in the circumstances mentioned in the section, instead of the trial re-commencing with a newly selected jury. Consequently, in s. 307 sub- section 1 A was introduced which directed that where the jurors were equally divided on all or any of the charges on which any accused person had been tried, the Judge must submit the case in respect of such accused to the High Court recording his opinion on such charge or charges and the grounds of his opinion. This direction, in our opinion, makes it clear that the whole case had to be submitted to the High Court. In our opinion, the amendments of 1923 and 1955 to s. 307 clearly indicate that Parliament itself thought that it was the whole case and number a part of it which was to be submitted to the High Court. Indeed, as already stated, s. 307, even before its amend- ment in 1955, when properly companystrued, leads to numberother reasonable companyclusion. It is number necessary to companysider the cases decided by some of the High Courts in India in this companynection. The Patna High Court in Hazari Lal-s case 1 expressed the opinion that having regard to the provisions of s. 307 a reference made thereunder must be of the whole case against the accused and number a part of it. If only a part of it is referred then the reference made under s. 307 is incompetent. That High Court reaffirmed the view taken in Hazari Lals case in the case of Ramjanam Tewari 2 . This was the view also taken by the three Judges of the Calcutta High Court in the case of The Emperor v. Bishnu Chandra Das 3 , two of whom, however, in rejecting the reference directed that the accused be acquitted. The third Judge, Mr. Justice McNair, however, companyfined himself to the observation that the Sessions Judge had disabled himself from making a valid reference under s. 307 of the Code by accepting the verdict of the jury against the accused on some of the charges. In our opinion, the view taken by the Patna High Court was companyrect and in accordance with the provisions of s. 307. It was, however, submitted on behalf of the appellants that in view of certain decisions of the Calcutta High Court and the Allahabad High Court, when a reference had in fact been made, it was open to the High Court to deal with it and record a judgment. Reference was made to the case of King Emperor v. Ananda Charan Ray 4 . It is true that in this case the learned Judges did companysider the evidence in order to ascertain whether the verdict of the jury was one which a body of reasonable men companyld have arrived at. The learned Judges, however, observed before companysidering the evidence in the case, If the learned Officiating Additional Sessions Judge companysidered that the interests of justice required a reference to this Court, I should say that he would have been better advised if he had referred the whole case leaving it to this Court to companysider the whole of the evidence that 1 1932 I.L.R. Pat. 395. 2 1935 I.L.R. Pat. 717. 3 1933 37 C. W. N. 1180. 4 1916 21 C.W.N. 435, 437. was placed before the jury. As it is, this Court is precluded from companysidering whether the accused mis- appropriated or had a hand in misappropriating any portion of these sums of Rs. 200 and Rs. 458. After referring to the evidence, the learned Judges expressed the following opinion The real truth of the matter is that, if the learned Judge companysidered that this was a case that ought to be referred under s. 307, Cr. P. C., he never ought to have sent up the case in this way by tying the hands of the Crown or of the Court or even the defence by agreeing with the verdict of the jury on the charges framed under sees. 406 and 477A of the Indian penal Code. As it is, he had precluded the Court from questioning or going behind that verdict and thus from companysidering the large body of evidence that was placed before the jury. In the result, we find it impossible in this case to accept the reference made by the learned Officiating Additional Sessions Judge and we think, having regard to the fact that the accused has been acquitted on the charges framed under secs. 406 and 477A, Indian Penal Code, we ought to accept the verdict of number guilty on the charges framed under sec. 467 read with see. 471 and sec. 474 1. P. C., and direct that the accused be acquitted. This decision, in substance, takes the same view as that expressed by the Patna High Court in the cases of Hazari Lal and Ramjanam Tewari. In the case of Emperor v. Nawal Behari 1 , the learned Judges of the Allahabad High Court held that when a Sessions Judge refers a case under s. 307 of the Code, he must refer the whole case against the particular accused and number merely those charges on which there happens to be a finding by the jury with which lie disagrees. This view is substantially in keeping with the view taken by the Patna High Court in the cases mentioned above. It is true that the learned Judges them proceeded to companysider the evidence and set aside the companyviction and sentence under s. 193 passed by the Sessions Judge and substituted in its place a companyviction by the High Court under s. 193. In our opinion, if the reference under s. 307 of the Code had to be of I 1930 I.L.R. All. 881. the whole case against the accused and number merely those charges on which the trial Judge disagreed with the jury, then the reference was incompetent and the High Court companyld number proceed to exercise any of the powers companyferred upon it under s. 307 3 , because the very foundation for the exercise of that power was lacking, the reference being incompetent. In the case of Emperor v. Jagmohan 1 , while the learned Judges held that the reference to the High Court only of a part of the case was irregular, the High Court companyld companysider number Only the part of the case referred to it, but the whole case. We are unable to accept this view. Whatever support this decision may give to the submission made by the learned Counsel for the appellant, we are clearly of the opinion that the decision of the Allahabad High Court in this case was erroneous in law. In Emperor v. Muktar 2 thelearned Judges were of the opinion that the reference was number in order when the trial Judge recorded a finding on some charges in respect of the very accused whose cases so far as other charges were companycerned were referred, but the defect was number necessarily fatal to the reference and the High Court might entertain the same. This view cannot be sustained, having regard to the provisions of s. 307. In our opinion, a reference made in the circumstances of the present case, was incompetent and the High Court should have rejected it and number proceeded to record any judgment of acquittal or companyviction. We, accordingly, allow the appeal, set aside the judgment of the High Court and hold that the reference under s. 307 to the High Court was incompetent. A question has arisen as to what companysequential order should be passed by this Court as the result of our companyclusion that the reference under s. 307 to the High Court was incompetent and the appeal succeeding. The High Court should have rejected the reference as incompetent and remitted the case to the Additional Sessions Judge for disposal according to law. I.L.R. 1947 All. 240. 2 1943 48 C.W.N. 547. We emphasise the absolute need for making a companypetent reference under s. 307 of the Code and the case being remitted to the Court making the reference as soon as possible if an incompetent reference is made in order to avoid legal companyplications, unnecessary waste of time and money and harassment to the accused. In this case the letter of reference is dated June 7, 1954, that is, more than three years ago. The occurrence took place on October 21, 1953. After such lapse of time we will number order that the case be returned to the Court of the Additional Sessions Judge of Alipur for disposal according to law, particularly as we are informed that the Judge who made the reference to the High Court has retired from service and it is doubtful whether, in law, his successor can at all deal with the case.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 130 of 1956. Appeal by special leave from the judgment and order dated May 12, 1955, of the Punjab High Court in Criminal Appeal No. 52-D of 1954, arising out of the judgment and order dated December 6, 1954, of the Court of the Special Judge at Delhi in Corruption Case No. 1 of 1954. 1038 C. Chatterjee and C. V. L. Narayan, for the appellant in Cr. A. No. 130 of 56. Jai Gopal Sethi and Naunit Lal, for the appellant in Cr. A. No. 25 of 56. K. Daphtary, Solicitor-General of India, A.M. Chatterjee, R. Khanna and R. H. Dhebar, for the respondent in both the appeals. 1957. December 3. The following Judgment of the Court was delivered by IMAM J.-A question of law, companymon to these appeals by special leave, requires determination hence they were heard together. Special leave in Criminal Appeal No. 130 of 1956 was limited to the question whether the trial companyrt had jurisdiction to take companynizance of the offence for want of sanction under s. 6 of the Prevention of Corruption Act, 1947 11 of 1947 , hereinafter referred to as the Act. Criminal Appeal No. 25 of 1956 was number so limited and additional points were raised for our companysideration, to which reference will be made when that appeal is specifically dealt with. The question of law, companymon in both these appeals, is whether there was any necessity for a sanction under s. 6 of the Act before a companyrt companyld take companynizance of an offence under s. 161 of the Indian Penal Code or s. 5 2 of the Act or both, alleged to have been companymitted by a person who at the time the companyrt was asked to take companynizance was number a public servant but was so at the time of the companymission of the offence. In Criminal Appeal No. 130 of 1956, the appellant was companyvicted under s. 5 2 of the Act and sentenced to six months simple imprisonment by the Special Judge, Delhi. He appealed against his companyviction and sentence to the Punjab High Court. That Court while admitting the appeal issued numberice upon the appellant to show cause why his sentence should number be enhanced. The High Court ultimately dismissed his appeal and enhanced the sentence of six months imprisonment to two years rigorous imprisonment. As in this appeal special leave has been granted limited 1039 to the question already stated, it is unnecessary to set out the prosecution case against the appellant. In Criminal Appeal No. 25 of 1956 the appellant had applied to the Allahabad High Court under s. 561A of the Code of Criminal Procedure for the quashing of the proceedings pending against him before the Special Judge. The application was dismissed. It is against the order dismissing his application that this appeal has been filed by the appellant. It is admitted that at the time the Special Judges companycerned purported to take companynizance the appellants were number public servants and that numberorder of sanction under s. 6 of the Act by a companypetent authority was on the record. At the time that the appellants are alleged to have companymitted the offence they were public servants. Section 6 of the Act states Previous sanction necessary for prosecution 1 No companyrt shall take companynizance of an offence punishable under section 161 or section 164 or section 165 of the Indian Penal Code Act 45 of 1860 , or under sub-section 2 of section 5 of this Act, alleged to have been companymitted by a public servant, except with the previous sanction, a in the case of a person who is employed in companynection with the affairs of the Union and is number removable from his office save by or with the sanction of the Central Government, of the Central Government, b in the case of a person who is employed in companynection with the affairs of a State and is number removable from his office save by or with the sanction of the State Government, of the State Government, c in the case of any other person, of the authority companypetent to remove him from his office. Where for any reason whatsoever any doubt arises whether the previous sanction as required under sub-section 1 should be given by the Central or State Government or any other authority, such sanction shall be given by that Government or authority which 1040 would have been companypetent to remove the public servant from his office at the time when the offence was alleged to have been companymitted. There is numberdispute that if at the time when a companyrt purports to take companynizance of offences punishable under s. 161, 164 or s. 165 of the Indian Penal Code or s. 5 2 of the Act companymitted by a public servant and that person is a public servant, companynizance cannot be taken by a companyrt unless a sanction by the companypetent authority has been previously accorded. The real companytroversy in these appeals is whether such a sanction is required before a companyrt can take companynizance in the case of a person who is number a public servant at the time the companyrt is asked to take companynizance, although the offence alleged against him was companymitted by him as a public servant. To determine this question s. 6 of the Act requires to be interpreted. In substance, it was urged on behalf of the appellants that on a proper interpretation of s. 6 of the Act the status of the accused at the time of the companymission of the offence alleged against him was the essence of the matter and number his status at the time the companyrt was asked to take companynizance of the offence, in which case a sanction under s. 6 of the Act was necessary before a companyrt companyld take companynizance although at that stage the accused had ceased to be a public servant. On the other band, the Solicitor-General companytended that on a proper interpretation of the provisions of s. 6 of the Act number only an offence mentioned therein must be companymitted by a public servant but that that person is still a public servant removable from his office by a companypetent authority at the time a companyrt was asked to take companynizance of the offence. Before we proceed to companystrue the provisions of s. 6 of the Act it is necessary to refer to some of the submissions made by the learned Counsel for the appellants. It was said that in companystruing the provisions of a statute a companyrt must attempt to ascertain the intention of the legislature and it must do this number only from the language of the statute, but also from the 1041 companysideration of the social companyditions which gave rise to it, and of the mischief which it was intended to remedy. It must supplement the written word so as to give force and life to the intention of the legislature. Reliance was also placed upon certain decisions companystruing the provisions of s. 197 of the Code of Criminal Procedure. Reference was also made to Art. 361 of the Constitution and s. 197A of the Code of Criminal Procedure in aid of the companystruction which the learned Counsel companytended for with reference to the words used in s. 6 of the Act. In companystruing the provisions of a statute it is essential for a companyrt, in the first instance, to give effect to the natural meaning of the words used therein, if those words are clear enough. It is only in the case of any ambiguity that a companyrt is entitled to ascertain the intention of the legislature by companystruing the provisions of the statute as a whole and taking into companysideration other matters and the circumstances which led to the enactment of the statute. Observations of Denning L. J. as he then was, in the case of Seaford Court Estates Ltd. v. Asher 1 were relied upon by Mr. Chatterjee. It is, however, clear that the observations of the learned Judge were made with reference to the provision of a statute which was ambiguous. We cannot companystrue the observations to mean that where the language of a statute was free from ambiguity a duty was cast upon the companyrt to do anything more than to give effect to the words used. Although reference was made to Art. 361 of the Constitution and s. 197A of the Code by Mr. Sethi, we are unable to see how the words used therein assist us in -con- struing the provisions of s. 6 of the Act. Reliance was placed on the decisions of the Nagpur High Court in the case of S. Y. Patil v. Vyankatswami 2 and the decision of the Court of the Judicial Commissioner of Sind in the case of Suganchand v. Seth Naraindas 3 , in support of the submission that even if a person had ceased to be a public servant before the prosecution started, such a person was 1 1949 2 K. B. 481, 498. 2 I. L. R. 1939 Nag. 419. A. I. R. 1932 Sind. I77. 1042 protected by the provisions of s. 197 of the Code and a sanction was necessary before a companyrt companyld take companynizance. It is true that so far as s. 197 of the Code is companycerned these two decisions do lend support to the submission made by the learned Counsel for the appellants. It is, however, to be numbericed that the decision of the Nagpur High Court, which was of a single Judge, was overruled by a Division Bench of that Court in the case of The State v. Hifzul Rahman 1 , where it was held that the person accused must be a public servant at the time of the accusation and s. 197 of the Code afforded numberprotection to a public servant if he had ceased to hold office. In the case of Prasad Chandra Banerji v. Emperor 2 , the Calcutta High Court held that the protection given by s. 197. of the Code applied only to a person who is still a public servant at the time the prosecution is launched and does number extend to a person who is numberlonger a public servant at that time but was in office when the offence charged was alleged to have been companymitted. Accordingly, numbersanction under s. 197 of the Code was necessary in order to prosecute a person who had ceased to be a public servant at the time of the launching of the prosecution. A similar view was taken by the Bombay High Court in the case of Imperator v. Joshi 3 , and by a single Judge of the Allahabad High Court in the case of Emperor v. Suraj Narain Chaube 4 . It would thus appear that the High Courts of Calcutta, Bombay, Allababad and Nagpur are agreed that s. 197 of the Code affords numberprotection to a person who is number a public servant at the time he is accused of an offence before a companyrt although at the time he companymitted the offence he was a public servant. The decision of the Punjab High Court in the case of The State v. Gurcharan Singh 5 , was brought to our numberice wherein it was held that in view of the form of wording in the two sections, namely s. 197 of the Code and a. 6 of the Act, the same principles would apply to them, having regard to the decisions of the Calcutta and Bombay High Courts and the protection afforded by s. 197 of I. L. R. 1951 Nag. 764. 2 1. L. R. 1944 1 Cal. 113. I. L. R. 1947 Bom. 706. 4 1. L. R. 1938 All. 776. A. I. R. 1952 Pun.89. 1043 the Code was available to a person who was a public servant while still in office but was number available to him when he had already been discharged from service before he was prosecuted. These cases may render assistance in understanding the reason why a public servant, while he is a public servant, cannot be prosecuted without a previous sanction for offences, companymitted by him as a public servant and thus may, be of some indirect help in companystruing the words used in s. 6 of the Act. Section 6, however, must be companystrued with reference to the words used therein independent of any companystruction which may have been placed by these decisions on the words used in s. 197 of the Code. Before an attempt is made to companystrue the words companytained in s. 6 of the Act some reference may be made to the power vested in a companyrt to take companynizance of an offence. Section 190 of the Code of Criminal Procedure companyfers a general power on a criminal companyrt to take companynizance of offences, but the exercise of such power in certain cases is prohibited by the provisions of ss. 195 to 199 of the Code unless the companyditions mentioned therein are companyplied with. Under the Criminal Law Amendment Act, 1952 XLVI of 1952 , Special Judges are appointed to try offences under s. 161, 162, 163, 164, 165 or s. 165A of the Indian, Penal Code or s. 5 2 of the Act. They are authorized to take companynizance of these offences without the accused person being companymitted to them for trial. The exercise of this general power to take companynizance by them is prohibited with respect to offences companymitted under s. 161, 164 or s. 165 of Indian Penal Code or under s. 5 2 of the Act by a public servant without the previous sanction of a companypetent authority. In our opinion, if a general power to take companynizance of an offence is vested in a companyrt, any prohibition to the exercise of that power, by any provision of law, must be companyfined to the terms of the prohibition. In enacting a law prohibiting the taking of companynizance of an offence by a companyrt, unless certain companyditions were companyplied with, the legislature did number purport to companydone the offence. It was primarily companycerned to 1044 see that prosecution for offences in cases companyeted by the prohibition shall number companymence without companyplying with the companyditions companytained therein, such as a previous sanction of a companypetent authority in the case of a public servant, and in other cases with the companysent of the authority or the party interested in the prosecution or aggrieved by the offence. There can be little doubt that in the case of a public servant the Central Government or the State Government or the authority companypetent to remove him from service is vitally interested in the matter of his prosecution. Such authority is directly companycerned in the matter as it has to decide whether to accord or number to accord its sanction for the prosecution of one of its servants. The authority companycerned may refuse to accord such sanction on the ground that the prosecution is frivolous or vexatious or on the ground that in the public Interest it would be inexpedient to do so. Without some safeguard of this kind a public servant may find it impossible to carry on his official duties efficiently. The object of the Act was to suppress bribery and companyruption. Its provisions are severe. Certain presumptions of guilt of offences companymitted under ss. 161 and 165A of the Indian Penal Code were enjoined by s. 4 of the Act unless the companytrary was proved by the accused. Section 5 of the Act created the offence if criminal misconduct on the part of a public servant, an offence unknown to any of the provisions of the Indian Penal Code dealing with bribery or companyruption. Sub-section 2 made such an offence punishable with imprisonment which may extend to a term of 7 years, or with fine, or with both. Under sub-s. 3 a companyrt shall presume that the accused was guilty of misconduct if it was proved that he or any other person on his behalf was in possession, for which the accused person companyld number satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income. These provisions of the Act indi- cate that it was the intention of the legislature to treat more severely than hitherto companyruption on the part of a public servant and number to companydone it in any manner whatsoever. If s. 6 had Dot found a place in 1045 the Act it is clear that companynizance of an offence under s.161, 164 or s. 165 of the Indian Penal Code or under s.5 2 of the Act companymitted by a public servant companyld be taken by a companyrt even if he had ceased to be a public servant. The mere fact that he had ceased to be a public servant after the companymission of the offence would number absolve him from his crime. Section 6 certainly does prohibit the taking of companynizance of his offence, without a previous sanction, while he is still a public servant but does that prohibition companytinue after he has ceased to be a public servant ? It is to determine that question which requires us to examine and companystrue the provisions of s. 6 of the Act and to express our opinion thereon. When the provisions of s. 6 of the Act are examined it is manifest that two companyditions must be fulfilled before its provisions become applicable. One is that the offences mentioned therein must be companymitted by a public servant and the other is that that person is employed in companynection with the affairs of the Union or a State and is number removable from his office save by or with the sanction of the Central Government or the State Government or is a public servant who is removable from his office by any other companypetent authority. Both these companyditions must be present to preventa companyrt from taking companynizance of an offence mentioned in the section without the previous sanction of the Central Government or the State Government or the authority companypetent to remove the public servant from his office. If either of these companyditions is lacking, the essential requirements of the section are. wanting and the provisions of the section do number stand in the way of a companyrt taking companynizance without a previous sanction. An offence under s. 161 of the Indian Penal Code can be companymitted by a public servant or by a person expecting to be a public servant, but s. 6 of the Act refers only to an offence companymitted by a publicservant under that section. If, therefore, at the time a companyrt was asked to take companynizance of an offence under s. 161 of the Indian Penal Code, the accused is a public servant but was number so at the time that the offence was companymitted, but at which time he was 1046 merely expecting to be a public servant, a previous sanction would be unnecessary before a companyrt companyld take companynizance. as the provisions of the section would be inapplicable. Conversely, if an offence under s. 161 of the Indian Penal Code was companymitted by a public servant, but, at the time a companyrt was asked to take companynizance of the offence, that person had ceased to be a public servant one of the two requirements to make s. 6 of the Act applicable would be lacking and a previous sanction would be unnecessary. The words in s. 6 1 of the Act are clear enough and they must be given effect to. There is numberhing in the words used in s. 6 1 to even remotely suggest that previous sanction was necessary before a companyrt companyld take companynizance of the offences mentioned therein in the case of a person who had ceased to be a public servant at the time the companyrt was asked to take companynizance, although he had been such a person at the time the offence was companymitted. It was suggested that el. c in s. 6 1 refers to persons other than those mentioned in cls. a and b . The words is employed are absent in this clause which would, therefore, apply to a person who had ceased to be a public servant though he was so at the time of the companymission of the offence. Clause c cannot be companystrued in this way. The expressions in the case of a person and in the case of any other person must refer to a public servant having regard to the first paragraph of the sub-section. Clauses a and b , therefore, would companyer the case of a public servant who is employed in companynection with the affairs of the Union or a State and is number removable from his office save by or with the sanction of the Central Government or the State Government and el. c would companyer the case of any other public servant whom a companypetent authority companyld remove from his office. The more important words in cl. c are of the authority companypetent to remove him from his office. A public servant who has ceased to be a public servant is number a person removable from any office by a companypetent authority. Section 2 of the Act states that a public servant, for the purpose of the Act, means a public servant as defined in s. 21 of the Indian Penal Code. Under 1047 cl. c , therefore, any one who is a public servant at the time a companyrt was asked to take companynizance, but does number companye within the description of a public servant under cls. a and b , is accused of an offence companymitted by him as a public servant as specified in s. 6 would be entitled to rely on the provisions of that section and object to the taking of companynizance without a previous sanction. To read cl. c in the way suggested on behalf of the appellants, would be to give a meaning to this clause which is number justified by the words employed therein. It was further suggested that the provisions of sub-s. 2 of s. 6 indicate that it was the status of the accused at the time of the companymission of the offence which was relevant rather than his status at the time a companyrt was asked to take companynizance. This sub-section was inserted into the Act by the Prevention of Corruption Second Amendment Act, 1952, and it purported to finally settle any doubts which may arise as to which authority should grant the sanction in the case of a public servant who had companymitted an offence mentioned in s. 6 1 and who at the time the companyrt was asked to take companynizance is still a public servant. For example, it is number difficult to imagine cases where a public servant employed by a State Government is subsequently employed by the Central Government and a question arises as to which of the two Governments is to grant the sanction for his prosecution. This sub-section resolves the difficulty by directing that where a doubt arises, the authority which was to grant the sanction was the one which was companypetent to remove him from his office at the time of the companymission of the offence. If the provisions of sub-s. 1 bear the companystruction which we place upon them, there is numberhing in sub-s. 2 which is in companyflict with that companystruction. Besides, there is numberhing in the language of sub-s. 2 which carries the meaning suggested on behalf of the appellants or which assists us in companystruing the provisions of sub-s. 1 . We cannot companystrue the words is employed and is number removable in cls. a and b and companypetent to remove him from his office in cl. c as was employed and was number removable and would have been I33 1048 companypetent to remove him from his office . To do so would be to substitute our own words for the words of the statute as companytained in these clauses. In Criminal Appeal No. 122 of 1954, dealt with by another judgment, where a similar question bad been raised, the appellant had suggested that two defects appearing in s. 197 of the Code of Criminal Procedure were intended to be remedied by the Act 1 that s. 197 did number apply to a public servant who had ceased to be a public servant at the time of the taking of companynizance of an offence and 2 that an offence under s. 161 of the Indian Penal Code companymitted by a public servant was number companyered by s. 197 of the Code, as such offence companyld number be said to have been companymitted by him while acting or purporting to act in the discharge of his official duty, having regard to the decisions of the companyrts in India and of the Privy Council. We cannot see how this assists us in companystruing s.6 of the Act. Whatever the phraseology of s.197 of the Code may have been in the past, the decisions of the companyrts in India that s. 197 of the Codedoes number apply to a person who had ceased to be a public servant at the time a companyrt was asked to take companynizance were based upon the words used in that section at the time the judgments were pronounced. These decisions laid emphasis on the words when any person who is a judge within the meaning of s. 19 of the Indian Penal Code or when any public servant who is number removable from his office It was held in these decisions that these words meant that the person must be a public servant at the time a companyrt was asked to take companynizance, although be may have been a public servant at the time of the companymission of the offence. It is true that unlike s. 197 of the Code, s. 6 of the Act does number companytain the words while acting or purporting to act in the discharge of his official duty . We have to companystrue s. 6 of the Act as we find it and the absence of these words from the section renders us numberassistance in its companystruction. In our opinion, in giving effect to the ordinary meaning of the words used in s. 6 of the Act, the companyclusion 1049 is inevitable that at the time a companyrt is asked to take companynizance number only the offence must have been companymitted by a public servant but the person accused is still a public servant removable from his office by a companypetent authority before the provisions of s. 6 can apply. In the present appeals, admittedly, the appellants had ceased to be public servants at the time the companyrt took companynizance of the offences alleged to have been companymitted by them as public servants. Accordingly the provisions of s. 6 of the Act did number apply and the prosecution against them was number vitiated by the lack of a previous sanction by a companypetent authority. Criminal Appeal 25 of 1956. In this appeal apart from the question that the companyrt companyld number take companynizance of the offence alleged against the appellant without a previous sanction of a companypetent authority, additional points had been taken for quashing the prosecution pending against him. The appellant was appointed Deputy Assistant Director Enforcement in the Ministry of Industry and Commerce on March 25, 1949 and was promoted to the office of Assistant Director on July 14, 1949. It was alleged that he accepted on September 11, 1951, a sum Rs. 10,000 as bribe in part payment out of an agreed amount of Rs. 30,000. An enquiry under r. 55 of the Civil Service Rules took place and thereafter he was dismissed from service on September 25, 1953. In the meantime, it appears that companyrespondence bad ensued between the appellant and the Government. On September 18, 1952, a final report was submitted to the companyrt under s. 173 of the Code of Criminal Procedure wherein it was stated that although a prosecution was recommended, the order of the Ministry of Commerce and Industry was that the appellant would be dealt with departmentally. On September 19, 1952, the Magistrate, by his order, approved of the closing of the investigation, discharged the appellant from his bail and directed that the sum of Rs. 10,000 seized from him, was to be returned to the companyplainant. The prosecution of the appellant was, 1050 however, recommenced on February II,, 1954, on the same materials and same allegations but on a fresh companyplaint. It, was companytended on behalf of the appellant, that once a sanction had been refused then that was the end of the prosecution for all times. If once the sanction was refused it companyld number ever be granted later on. If the prosecution had been dropped, then it companyld number be revived in a case where a. sanction was necessary prior to a prosecution, and a promise number to prosecute prevented a reconsideration of the matter. Lastly, it was urged that in the circumstances of the case it was an abuse of the process of the companyrt to allow a prosecution to be recommenced after it had been withdrawn. We have examined the companyrespondence which has been referred to in the petition for special leave and which is to be found on the record of this case. There is numberhing in them to establish the allegation that a sanction for the prosecution of the appellant was positively refused. All that is indicated is that the Government chose to proceed against the appellant departmentally. It can hardly be said that in doing so the Government had positively refused to grant sanction for the prosecution of the appellant. Indeed, it may be legitimately said that the Government preferred to wait the result of a departmental enquiry. If that enquiry exonerated the appellant the occasion for granting a sanction may number arise. If, on the other band, the departmental enquiry established the allegation against the appellant, the Government might find itself in possession of more material than that disclosed by the police investigation on which to decide whether a sanction should or should number be granted. We cannot read into the companyrespondence, as was suggested on behalf of the appellant, that there was a promise on the part of the Government number to prosecute the appellant. It is true that there was a final report and a withdrawal of the case before a Magistrate. At the stage when the withdrawal took place the appellant was still a public servant and the companyrt companyld number take 1051 companynizance of the offence under s, 161 of the Indian Penal Code and under s. 5 2 of the Act without a previous sanction. The withdrawal of the case at that stage meant numbermore than this that the appellant was discharged. A withdrawal of a case resulting merely in a discharge does number prevent the prosecution being recommenced on a fresh companyplaint. On February 11, 1954, when the fresh companyplaint was filed the appellant was number a public servant and therefore the companyrt companyld take companynizance without a previous sanction. It is unnecessary for us to say whether once a sanction is positively refused a fresh sanction cannot be granted, because we are satisfied, on the materials before us, that, in fact, there was numberpositive refusal to sanction the prosecution of the appellant.

Case appeal was rejected by the Supreme Court

ORIGINAL JURISDICTI0N Petitions Nos. 377 of 1955 and 42, 46, 164 and 423 of 1956. Petitions under Article 32 of the Constitution of India for the enforcement of fundamental rights Petitioner in person in Petitions Nos. 377 of 1955 and 164 and 423 of 1956. J. Umrigar and Y. Kumar, for petitioner in Petitions Nos. 42 and 46 of 1956. K. Daphtary, Solicitor-General of India, Porus Mehta and R. H. Dhebar, for respondents in Petitions Nos. 42, 46 and 423 of 1956. K. Daphtary, Solicitor-General of India, B. Sen and R. Dhebar, for respondents in Petitions Nos. 377 of 1955 and 164 of 1956. 1957. February 21. The Judgment of the Court was delivered by GAJENDRAGADKAR J.-This is a group of five petitions filed by the petitioners Messrs Bhatnagars Co. Private Ltd. In all these petitions, the petitioner Shri B. S. Bhatnagar, Managing Director of the above companypany, seeks to obtain appropriate writs from this Court mainly in respect of orders which have been passed by the Sea Customs Authorities against the petitioner. The petitioner seems to feel a grievance that, in the matter of licences which had been issued to him for importing soda ash, he has number received a fair treatment from the appropriate authorities and, since the impugned orders were passed, he has been moving the High Court of Punjab and this Court by several petitions under the Constitution. The present petitions show obvious traces of unskilled draftsmanship. They are extremely diffused and in many places incoherent. Statements of fact are number logically or chronologically made and there is companyplete companyfusion in the narration of the story giving rise to the petitioners claim. In several places, the petitions refer to facts which are both irrelevant and immaterial and, often enough, the petitioner is unable to restrain him. self from making unjustified and irrelevant suggestions against the authorities. Even in regard to the claim ultimately made by the petitioner, it is number easy to find what exactly the petitioners grievance is and what particular writ he seeks to obtain from this Court. However, since the petitions purport to invoke the jurisdiction of this Court substantially under Art. 32 of the Constitution, it is necessary to deal with the relevant points in disposing of these petitions. Three of the petitions have been argued by Shri Bhatnagar in person. They are Petitions Nos. 423 and 164 of 1956 and No. 377 of 1955. Petitions Nos. 42 and 46 of 1956 have been argued by Shri Umrigar on behalf of the petitioner. The material facts which it is essential to mention are very few and they i.e within a very narrow companypass. It appears that the petitioner obtained a licence for the import of soda ash only worth about Rs. 50,00,000 during the free licensing period in 1952. In pursuance of this licence, and relying on the same, companysignments of soda ash to the extent of 100 tons, 200 tons and 20 tons respectively were received at Bombay but meanwhile the Customs Authorities had received information that, though the petitioner had obtained a licence in his name for the import of soda ash for such a large amount as Rs. 50,00,000, his capital did number exceed Rs. 15,000 and that he was in fact trafficking in these licences. On receiving this report, investigation was made and subsequently the matter was left in charge of the Special Police Establishment. During the companyrse of this investigation, certain documents were seized from the petitioner-companys office as well as from the office of one Messrs N. Jivanlal Co. at Bombay. The companyplaint made against the petitioner that he was trafficking in licences was companyfirmed by this investigation. It transpired that a person carrying on business in the name of Messrs. N. Jivanlal Co., had a free hand in dealing with the licences of the petitioner and that the petitioner used only to receive companymission for the imports that he allowed to be made in the name of Messrs Bhatnagars Co., Ltd. In regard to the two companysignments of 100 tons and 20 tons of soda ash respectively, it was found on an inspection of the documents that the same had been imported by Messrs N. Jivanlal Co., and since Messrs N. Jivanlal Co., held numberlicence, the companysignments were seized by the Collector of Customs. The offices of the petitioner and Messrs N. Jivanlal Co., were raided during the companyrse of this investigation on November 7,1952 and February 6, 1953, respectively. The goods arrived in Bombay in March and April 1953 and they were companyfiscated by the Collector of Customs in May and June 1953. Subsequently, the documents including the licences which had been seized were returned to the petitioner. The companyfiscation of the goods was challenged by the petitioner by preferring an appeal to the Central Board of Revenue. The said appeal was, however, dismissed. The petitioner then moved the Central Government against this, order but on September 22, 1955, the Central Government refused to interfere. It appears that on March 31, 1956, the Collector of Customs ordered that the goods should be auctioned. When this order was passed, the petitioner filed one of the petitions before us. - He obtained an interim order of stay but the said order was ultimately vacated. Broadly stated, these are the facts which give rise to the present petitions. Though five petitions have been presented by the petitioner, his grievance substantially is against the companyfiscation of the companysignments of soda ash and against the seizure of his licences by the investigating authorities Each petition seeks to put the grievance of the petitioner in a different form and, though the prayers ultimately made are also number of the same pattern, in the main, the petitioner wants this Court to give him relief against what he regards as illegal seizure of the goods and against the virtual invalidation of his licences for import. The period during which the licences granted to him companyld have been operated upon has expired and the petitioner, in one of his petitions, seeks an order from this Court direct- ing the Government to revalidate the licences so as to allow the petitioner to import the article in question during the unexpired period of his licences. Though it would have been possible to deal with these petitions companylectively by delivering a, companymon judgment, we would prefer to deal with the matter separately and companysider the points raised in each petition by itself. Petition No. 423 of 1956 in a sense stands apart from the other petitions in the present group. The facts which we have already mentioned are enumerated by the petitioner even in this petition but the ,substantial relief which he seeks to claim and which the petitioner pressed before us in his argument is in respect of his allegation that the -Union of India and other respondents to the petition have acted in companytempt of this Court and appropriate action should, therefore, be taken by us against the said respondents. This companytention arises in this way. The petitioner had made a similar petition to this Court, No. 571 of 1954, in respect of one of the three companysignments, in question. This petition had companye before this Court for hearing on March 24, 1955. Shri K. R. Chaudhury appeared for the petitioner before this Court. The order passed by this Court would show that the learned Solicitor-General of India made a statement to the Court indicating that the goods which had been companyfiscated by the Customs Authorities would number be, sold or otherwise dealt with for a month from the date of the companymunication to the petitioner of the final order that the Central Government may pass in the revisional petition preferred by him before them. Acting on this under. taking, this Court allowed the petitioner a period of one month from the date of the companymunication to him of the final order which the Central Government might pass on his revisional petition to enable him to file a petition for Special Leave to appeal if he was so advised. Then the order recorded the undertaking given by the Solicitor-General. Subject to this order the petition was dismissed. However, numberorder was passed as to companyts. It is companymon ground that for several months thereafter the revisional petition preferred by the petitioner to the Central Government was number disposed of. Ultimately it was dismissed. The petitioner seems to be under the impression that the Solicitor-General, on behalf of the Central Government, had given an undertaking that the petitioners revisional petition would be disposed of within a certain specified time. Indeed the petition seeks to suggest that the undertaking was that the revisional petition would be dispose immediately in a day or two, and, since the revisional petition was number disposed of within the time mentioned by the Solicitor-General, the petitioner says that all the respondents are guilty of companytempt. It is clear that the petitioners grievance and the prayer for a -writ are entirely misconceived. The petitioner is entirely in error in assuming that, on behalf of the Union of India, any undertaking was given that his revisional petition would be disposed of within a day or two. Indeed, the Solicitor- General fairly told us that, at the time when the petitioners earlier application was disposed of, he had expressed the hope that the petitioners revisional petition would be dealt with by the Central Government at an early date but the expression of this hope had numberhing to do with the undertaking which the Solicitor-General gave and which was included in the Courts order. The petitioner presumably thinks that the Courts order required that his revisional petition should be disposed of by the Central Government within a month. This assumption is entirely unwarranted. The period of one month which is mentioned in the order was the period granted to the petitioner to move this Court for Special Leave after the decision of his revisional petition by the Central Government was companymunicated to him. In other words, if the decision of the Central Government had gone against the petitioner, the petitioner was given one months period within which to move this Court for Special Leave and the Union of India agreed number to deal with the property of the petitioner or dispose of it during that period. In our opinion, the order is plain and unambiguous and there is numberscope for any mis- understanding whatever. If numberundertaking was given as assumed by the petitioner, it is impossible to understand how any companytempt can arise on the ground that the undertaking had number been companyplied with. Besides, the petitioner has number stopped to companysider which person the Union of India represents as Respondent No. 1 in his petition. He has also number paused to companysider how the other respondents companyld be guilty of companytempt. We have numberhesitation in holding that the prayer for a writ in respect of the alleged companytempt made by the petitioner in this petition is thoroughly unjustified and, we regret to add, wholly irresponsible. This was the only point, which the petitioner urged before us in this petition. The result is the petition fails and it must be dismissed with companyts. In Petition No. 164 of 1956, so far as we were able to gather, the petitioners grievance is in respect of a policy statement made by the Government in the Press Note dated February 3, 1955 and Public Notice No. 25-ITC PN 56 dated June 30, 1956. The petitioners companytention appears to be that the policy enunciated in these two documents amounts to a monopoly and he wants this Court to issue appropriate writs terminating this monopoly and to ensure to the petitioner his fundamental right of carrying on his trade and business. In our opinion, this petition is also entirely misconceived and there is numbersubstance in the companytention raised by the petitioner. It is hardly necessary to emphasize that, in modern times, the export and import policy of any democratic State is bound to be flexible. The needs of the companyntry, the position of foreign exchange, the need to protect national industries and all other relevant companysiderations have to be examined by the Central Government from time to time and rules in regard to export and import suitably adjusted. It would, therefore, be idle to suggest that there should be unfettered and unrestricted freedom of export and import or that the policy of the Government in regard to export and import should be fixed and number changed according to the requirements of the companyntry. It is in the light of this position that the policy statement in the Press Note has to be companysidered. The Press Note companyers several companymodities, but, since we are companycerned with Light soda ash in the present case, it would be relevant to refer briefly to the - companytents of the Press Note in regard to Light soda ash. In regard to this companymodity, Government have decided, says the Press Note, that the import should be canalised through importer-stockiats who would be required to keep buffer stocks and effect sale in a manner so as to eliminate fluctuations in prices and supplies experienced by companysumers in the recent past. The Government realized that, without canalisation of distribution of this companymodity, companysumers were always at the mercy of the importers and even distribution of the companymodity to all parts of the companyntry where it was needed was also difficult to obtain. That is why the Government decided to canalise the distribution of this. companymodity with the assistance of two selling organisations of Messrs. Tata Oil Mills Co. Ltd., and Messrs. I.C.I. India Ltd. These two companycerns had agreed to procure soda ash from suppliers selected on the basis of offers which were being invited by means of public numberice which was issued on the same day as the Press Note. Then the Press Note companycludes that soda ash so imported would be stocked at companyvenient centres and sold in accordance with the general directions that may be issued by the Government from time to time. The sale price would be fixed by the Government on fo.r. Port basis and the importer-stockists would be paid remuneration for their services at the rate of 12 1/2 of the landed companyt, additional profit, if any, on the transaction being made over to Government. The Public Notice which was issued about the same time gives the relevant particulars in regard to the import of soda ash and other companymodities. Tenders were invited and cl. 4 of the Public Notice shows that the offerer whose offer was accepted by the Chief Controller of Imports would be required to enter into a companytract of sale within ten days of the acceptance of the offer with the importer-distributor selected by the Government in that behalf, No doubt discretion was left to the Chief Controller of Imports to reject any offer without assigning any reason. Subject to the terms and companyditions set out in the Notice, if a companytract was companycluded, an import licence for the quantity companytracted to be purchased would be issued in favour of the buyer subject to such companyditions as might be imposed by the Government of India in that behalf. It appears that, prior to 1953, import licences were freely granted. In 1953, licences began to be granted to established importers subject to certain companyditions. It also appears that Government decided from time to time the total quantity of the specified companymodity which should be imported. Then the extent of the business of the applicant for licences during the prescribed period was taken into account and the total amount of import was then distributed pro rata amongst the several applicants. When it was found that even this method did number work satisfactorily, the Government decided to canalise distribution but while canalisation was introduced in this manner, tenders were invited for import licences and they were companysidered on merits and licences granted to several claimants. It may be that, if the I.C.I. and the Tata Oil Mills Co. Ltd., were amongst the applicants for licences, their companypetitors in the line may have found it difficult to fight with these two powerful rivals but that is very different from saying that, by the method of canalisation, the Government had introduced a monopoly in the import of the companymodity in question. It is also important to emphasize that the petitioner is number even an established importer. He was granted a licence during the free period, and so it is difficult to understand his grievance that a monopoly had been created and that -he was thereby deprived of his fundamental right to carry on his trade Government found that the importers of soda ash resorted to malpractices leading to speculation, and violent fluctuations, in prices of the companymodity. It was open to the Government, and indeed national interests made it their duty, to intervene and regulate the distribution of the companymodity in a suitable manner. That is all that Government purported to do by the policy statement to which objection has been taken by the petitioner. Besides, it is difficult to entertain the argument from the present petitioner that the alleged monopoly has affected his right to carry on trade. In substance numbermonopoly has been created and the petitioners application is entirely misconceived. The result is the petition fails and must be dismissed with companyts. Petition No. 377 of 1955 is directed broadly against orders of companyfiscation and sale passed by the relevant authorities and the petitioner claims that an appropriate writ should be issued by this Court calling upon the said authorities to forbear from giving effect to the said orders. We have already mentioned the material facts in regard to the companyfiscation of the companysignments of soda ash of 100 tons and 20 tons respectively which has given rise to all these proceedings. Now, the order dated May 3, 1954, has been passed by the Controller of Imports and Exports for Chief Controller of Imports and Exports and it companymunicates to the petitioner the decision of the Chief Controller that numberlicence or customs clearance permit would be granted to him against his application for and upto the licensing period July 1953. The petitioner was, however, told that his applications for January-June 1954 licensing period would be dealt with in the numbermal companyrse according to the policy companytained in the Red Book. Then the order adds that it had been decided that re-validation of the licences mentioned in Annexure A to the petitioners advocates letter on April 20, 1954, companyld number be allowed. That is why the said licences were returned to the petitioner. It is this latter part of the order by which the petitioner feels aggrieved and against which the petitioner seeks remedy by the 7l2 present petition. The petitioners case is that, since he was granted licences which were to be alive for one year from February 13, 1952, the illegal seizure of the licence and the unauthorised companyfiscation of the companysignments in question caused companysiderable. prejudice to him. The return of the licences is poor companysolation to the petitioner. because the period during which the licences were to operate had already expired. He, therefore, claims that the licences should be revalidated in the sense that the period during which he can operate upon those licences should be suitably extended. It is true that if the relevant authorities were inclined to revalidate the licences in that sense, it would have been open to them to do so. But it is difficult to understand number the petitioner can invoke the jurisdiction of this Court under Art. 32 of the Constitution for obtaining this relief. We do number propose to discuss this matter elaborately because, in our opinion, the position in law is abundantly clear. The authorities have found that, though the licences were obtained by the petitioner in his name, he has been,trafficking in these licences, that the, companysignments had been ordered by another individual Messrs. N. Jivanlal Co., that the said individual holds numberlicence for import of soda ash and as such the companysignments received by the said individual are liable to be companyfiscated. If the petitioners grievance is that the view taken by the appropriate authorities in this matter is erroneous, that is number a matter which can be legitimately agitated before us in ,a petitition under Art. It may perhaps be, as the learned Solicitor-General suggested, that the petitioner may have a remedy by suit for damages but that is a matter with which we are number companycerned. If the goods have been seized in accordance with law and they have been seized as a result of the findings recorded by the relevant authorities companypetent to hold enquiry under the Sea Customs Act, it is number open to the petitioner to companytend that we should ask the authorities to exercise discretion in favour of the petitioner and allow his licences a further lease of life. Essentially the petitioners grievance is against the companyclusions of fact reached by the relevant authorities. If the said companyclusions cannot be challenged before us in the present writ petition, the petitioner would obviously number be entitled to any relief of the kind claimed by him. In the result, the petition fails and must be dismissed with companyts. That leaves two more petitions filed by the petitioner, Petitions Nos. 42 of 1956 and 46 of 1956. These petitions have been argued before us by Shri Umrigar and, on behalf of the petitioner, Shri Umrigar has raised three points before us. He companytends that the Import-Export, Act does number apply to soda ash and that it is every citizens right to import and export this companymodity without a licence. If that be the true position, companyfiscation of the two companysignments would be illegal, and so, he wants an appropriate writ from this Court against the Central Government. In the alternative, he argues that the legislation which authorises the issue of licences amounts to a delegated legislation and -as such is invalid. Again, if legislation is invalid on the ground alleged, companyfiscation of the two companysignments would be invalid and the petitioner would be entitled to a writ. Failing these two companytentions, Shri Umrigar argues that the companyclusion of the relevant authorities that his client was trafficking in licences is based on numberlegal evidence and must, therefore, be reversed by this Court and appropriate relief given to him on the basis that the petitioner had obtained licences bona fide for his own personal use and the companytrary view taken by the relevant authorities and the subsequent companyfiscation of the companysignments were illegal and ultra vires. We would number briefly deal with these three points in the order in which they were urged before us by Shri Umrigar. The first argument is based upon the fact that, while enacting The Imports and Exports Control Act, 1947, Act No. XVIII of 1947, the provisions companytained in r. 84 2 of the Defence of India Rules have number been included in the Act and the companytention, which at best may be characterised as ingenious, is that the object of omitting the said provisions while enacting the subsequent Act of 1947 was to release, from the operation of the Import Act, articles which would have fallen under the said omitted provisions. R. 84 of the Defence of India Rules by sub-r. 1 defines export and import. Import means bringing into British India by sea, land or air. Export -means taking out of British India by sea, land or air. Then sub-s. 2 provides The Central Government may by a numberified order prohibit or restrict the import or export of all goods or goods of any specified description, from or to any specified person or class of persons Sub-r. 3 then provides The Central Government may by numberified order make provision for prohibiting, restricting or otherwise companytrolling, in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order,- the import, export, carriage companystwise or shipment as ships stores of all goods or goods of any specified description the shipment of fresh water on seagoing vessels the bringing into any port or place in British India of goods of any specified description intended to be taken out of British India without being removed from the ship or companyveyance in which they are being carried. Shri Umrigar companytends that the import of soda ash companyld have been legitimately regulated under the provisions of r. 84, sub-r. 2 but since this sub-rule has number been enacted under Act XVIII of 1947, all regulations made by the Central Government and terms and companyditions laid down in regard to the granting of licences are ultra vires of the Act. Act XVIII of 1947 gives substantially the same meaning to the words export and import and the operative portion of the Act is companytained in s. 3 which is the same as r. 84, sub-r. 3 , of the Defence of India Rules. In order to make his argument plausible, Shri Umrigar seeks to put a very narrow, artificial and unreasonable restriction upon s. 3, sub-s. 1 a of Act XVIII of 1947. Before dealing with this argument, however, it would be companyvenient to set out the said section as under Powers to prohibit or restrict imports and exports The Central Government may, by order published in the official Gazette, make provision for prohibiting. restricting or otherwise companytrolling, in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order,- a the import, export, carriage companystwise or shipment as ships stores of goods of any specified description b the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or companyveyance in which they are being carried. All goods to which any order under sub-section 1 applies shall be deemed to be goods of which the import or export has been prohibited or restricted under section 19 of the Sea Customs Act, 1878 VIII of 1878 , and all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word shall therein the word may were substituted. Notwithstanding anything companytained in the aforesaid Act, the Central Government may, by order, published in the official Gazette, prohibit, restrict or impose companyditions on the clearance, whether for home companysumption or for shipment abroad, of any goods or class of goods imported into India. Shri Umrigar companytends that s. 3 1 a cannot apply to the import of soda ash, because, according to him, it is only goods of a specified description which are imported or exported, carried companystwise or shipped as ships stores that fall within the mischief of the said provision. In other words, he reads the expression carriage companystwise and ,shipment as ships stores as companystituting adjectival clauses governing the words import and export. In our opinion, such a companystruetion is wholly unreasonable. We have numberdoubt that this provision has to be read disjunctively and distributively, and so read, the import. of goods of any specified descrip- tion would attract the application of the said provision. If we bear in mind the definition of the words import and export , it would be obvious that articles that are carried companystwise would never fall within the cate. gory of either import or export. The assumption that the Legislature, wanted to release all kinds of goods from the application of s. 3 1 a is, in our opinion, so companypletely inconsistent with, the plain and natural meaning of the material clause that we have numberhesitation in rejecting Shri Umrigars argument. If the words used in the clause are given their natural meaning, it is clear that the Legislature must have felt, in enacting this Act, that it was unnecessary to companytinue by reenactment the provisions of r. 84 2 in the present Act. What was specifically provided in the said rule is in effect included in s. 3 1 a . We must, therefore, hold that the argument that numberlicence was required for the import of soda ash and so all the orders passed by the appropriate authorities in regard to the companyfiscation of the companysignments are invalid must fail. The next argument is that the material provision is ultra vires as it amounts to delegated legislation. The challenge to the validity of legislative enactments on the ground of delegated legislation often enough -presents problems which are number easy of solution. The recent history of judicial decisions, however, shows that, though there is companysiderable divergence of opinion in the approach to the question of dealing with such a challenge, some principles may be said to be fairly well settled. There is numberdoubt that legislation which is companyditional, properly so-called, must be distinguished from legislation which is delegated. Shri Umrigar companycedes that where the Legislature provides and lays down principles underlying the provisions of a parti- cular statute and also affords guidance for the implementation or enforcement of the said principles, it is open to the Legislature to leave the actual implementation or enforcement to its chosen delegate. The time when the provision should be implemented, the period during which it should be implemented or the place where it should be applied can, according to him, in appropriate oases be validly left by the Legislature to its delegate. He, however, companytends that, in the impugned Act, the Legislature does number lay down principle and gives numberguidance to the delegate while leaving the implementation of the statutory provisions to him and companysequently the validity of the legislative enactment suffers from a serious infirmity on the ground that the Legislature has surrendered its legislative power in favour of its delegate. In dealing with this narrow ground of challenge, it would be necessary to companysider the preamble and the material provisions of the Act to find out whether questions of policy have been clearly decided by the Legislature -and whether guidance has been given to the delegate in the matter of implementing the provisions of the statute. Unfortunately for Shri Umrigar his challenge to the validity of the impugned section under the Imports and Exports Act is companypletely companyered by the decision of this Court in Harishankar Bagla v. The State of Madhya Pradesh 1 . In this case, so. -3 and 4 of the Essential Supplies Temporary Powers Act, 1946, were attacked as ultra vires on the ground of delegated legislation. This challenge was repelled. In repelling the argument of delegated legislation, Mahajan Chief Justice who delivered the judgment of the Court companyceded that the Legislature must declare the policy of the law and the legal principles which are to companytrol any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function , the judgment proceeds to add, companysists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of companyduct . Then the learned Chief Justice referred to the fact that the Legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential companymodities and of securing equitable distribution and availability at fair prices. It was held that the principle was clear and it offered sufficient guidance to the Central Government in exercising its powers under s. 3. In other words, in companysidering the question as to 1 1955 1 S.C.R. 380. whether guidance was afforded to the delegate in bring. ing into operation the material provisions of the Act by laying down principles in that behalf, the Court companysidered the statement of the principles companytained in the preamble to the Act as well as in the material provisions of s. 3 itself. This decision shows that if we can find a reasonably clear statement of policy underlying the provisions of the Act either in the provisions of the Act or in the preamble, then any part of the Act cannot be attacked on the ground of delegated legislation by suggesting that Questions of policy have been left to the delegate. Turning to the impugned sections of the present Act, it is necessary to remember that the present Act purports to companytinue for a limited period powers to prohibit or companytrol imports and exports which had already been enacted by the Defence of India Act and the Rules framed thereunder. In other words, this Act does number purport to enact the material provisions for the first time but it purports to companytinue the previously existing provisions in that behalf and so it would be legitimate to companysider the preamble of the predecessor Act and relevant provisions in it to find out whether the Legislature has laid down clearly the policy underlying that Act and has enunciated principles for the guidance of those to whom authority to implement the Act has been delegated. The preamble to the present Act says that it was expedient to companytinue for a limited period powers to prohibit, restrict or otherwise companytrol imports and exports. The preamble to the Defence of India Act refers to the emergency which had arisen when the Act was passed and refer, inter alia, to the necessity to take special measures to ensure the public safety and public interest. Section 2 of the said Act further provides that the Central Government thought that it was essential to secure public safety and maintenance of public order and, what is more relevant and material, the maintenance of supplies and services essential to the life of the companymunity. Thus it is clear that the broad and main principle underlying the present Act, like its predecessor, was to maintain supplies essential to the life of the companymunity. Thus, if the preamble and the relevant section of the earlier Act are read in the light of the preamble of the present Act, it would be difficult to distinguish this Act from the Essential Supplies Act with which this Court was companycerned in Harishankar Baglas case Incidentally, we may also observe that in Pannalal Binjraj v. The Union of India 2 , where the vires of. a. 5 7-A of the Income. Tax Act were put in issue before this Court, the challenge was repelled and, during the-course of the judgment delivered on December 21, 1956, the previous history of the earlier Income-Tax Acts was taken into account to decide what policy companyld be said to underlie the provisions of the impugned section. The last argument of Shri Umrigar is patently untenable. No doubt Shri Umrigar began this argument by companytending that the finding made against the petitioner that he was trafficking in his licences and that the companysignments in question did number really belong to him was based on numberevidence but ultimately he companyld number help companyceding the fact that there were certain circumstances on which the appropriate authorities relied against the petitioner. The companytention that a finding made by a companypetent authority is based on numberlegal evidence is easy to make but very difficult to establish. Such a companytention can succeed only when it is shown that there is really numberlegal evidence in support of the view taken by the appropriate authorities. In the present case, it is impossible to accede to the assumption that there is numberlegal evidence against the petitioner. His poor financial resources, his companyduct at all material times when companysignments were ordered, the suspicions attaching to the very existence of the firm Messrs. N. Jivanlal Co. in Bombay and the prominent part played by this firm at all stages of the transaction in regard to the companysignments as well as the reckless allegations which were made by the petitioner before the authorities which were found to be untrue by the appropriate authorities, cannot be summarily dismissed as being irrelevant or as number companystituting legal evidence. At the highest it may be said that there 1 1955 1 S.C.R. 380. 2 1957 S.C.R. 233. are some circumstances on which Shri Umrigar wants to rely in favour of the bonafides of his client whereas there is. a large number of circumstances against him. If all the appropriate authorities, on companysidering these circumstances, companycurrently found against the petitioner, that obviously is number a matter which can be legitimately agitated in the present petition. That is why we do number propose to deal with this aspect of the matter any further. In the result, both Petitions Nos.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 234 of 1959. Appeal from the order dated February 15, 1957 of the Bombay High Court of Judicature at Nagpur in Special Civil Application No. 2-N of 1956. P. Varma, for appellant No. 1. S. Shastri and Ganpat Rai, for respondent No. 1. R. L. Iyengar and T. M. Sen, for respondent No. 2. 1961. March 28. The Judgment of the Court was delivered by KAPUR, J.-This is an appeal on a certificate by the High Court of Bombay against the judgment and order of that Court passed on a petition under Art. 226 of the Constitution by the present appellants in regard to the legality of the numberification levying an octroi duty on certain goods. The appellants are some of the ratepayers of the Municipal Committee of Shegaon which is respondent No. I in this appeal. The other respondent is the State of Bombay. The appellants were carrying on trade and business which involved their bringing goods within the limits of the Municipal Committee. On July 25,1954, the Municipal Committee passed a resolution for tile purpose of levying an octroi duty instead of terminal tax. This resolution was published in the State Gazette on June 29, 1956, along with rules for assessment. Oil August 4, 1956, objections were invited to the proposed tax. The objections by the first appellant were filed on August 4, 1956, and by some others on August 5 and 6. At a meeting of the Municipal Committee dated August 16, 1956, the objections of the other appellants were rejected as being time barred and those by the first appellant were rejected because it was the only objector whose objections were within time. Some representations were made by the first appellant to the Government and a few days later the other objectors also made similar representations but the Government issued the numberification sanctioning the imposition of the tax and the Draft Rules on October 27, 1956, though the Gazette Notifications were published on two separate dates, i.e., October 30 and October 31, 1956. The appellants then filed a petition under Art. 226 in the High Court of Bombay at Nagpur challenging the legality of the, imposition of the tax. Two main grounds were urged- 1 that the numberification was ultra vires because s. 67 of the C. P. Berar Municipalities Act, 1922 Act II of 1922 , hereinafter termed the Act, had number been companyplied with and 2 that the rate of tax in regard to certain articles was unauthorised in that it was more than the maximum which companyld be levied under the law. The High Court rejected the first ground but accepted the second objection and gave relief accordingly. Appellants Nos. 2 to 6 have number taken steps for the prosecution of the appeal and the appeal, in so far as it relates to them, is dismissed for number-prosecution. The appellant No. 1 before us has challenged the vires of the imposition on two grounds 1 that all the steps necessary for the imposition of the octroi duty had number been taken and therefore s. 67 had number been companyplied with and 2 that as a matter of fact there was numbernotification imposing an octroi duty. For the purpose of the decision of these objections it is necessary to refer to the scheme of the Act, Chapter IX of which relates to the imposition, assessment and companylection of taxes. Section 66 enumerates the taxes which may be imposed and s. 67 prescribes the procedure for imposing taxes. Section 67 reads as under--- Section 67 1 A companymittee may at a special meeting, pass a resolution to propose the imposition of any tax under section 66. When such a resolution has been passed, the companymittee Bhall publish in accordance with rules made under this Act, a numberice defining the class of persons or description of property proposed to be taxed, the amount or rate of the tax to be imposed and the system of assessment to be adopted. Any inhabitant of the municipality objecting to the proposed tax may, in thirty days from the publication of the numberice, submit his objection in writing to the companymittee. The companymittee shall take the proposal and a objections received thereto into companysideration at a special meeting, and may modify the proposals so as number to affect their substance and may then forward them to the Provincial Government along with all objections received, its decisions thereon and its reasons therefore. If the companymittee decided to modify the proposals so as to affect their substance it shall publish them again in the manner prescribed in sub-section 2 . The Provincial Government, on receiving such proposals may sanction or refuse to sanction the same, or sanction them subject to such modifications as it may think fit, or return them to the companymittee for further companysideration 6 If any proposals for taxation have been sanctioned under sub-Section 5 the Provincial Government may, by numberification direct the imposition of the tax as sanctioned from such date as may be specified in such numberification, and thereupon, the tax shall companye into effect as from the date so speci- fied. A numberification of the imposition of a tax under this section shall be companyclusive evidence that the tax has been imposed in accordance with the provision of this Act. The objection to the vires of the numberification in regard to procedure is that the objections raised by appellant No. 1, though within time, werenot companysidered on their merits and were rejected merely on the ground that there was only one objector and as this was one of the essential steps for the validity of the imposition it companyld number be said that s. 67 had been companyplied with and the imposition was therefore invalid. The High Court rejected this plea because of s. 67 8 , although it found that number-consideration of the objections was an error in procedure. The language of sub- s. 8 lends support to this view. It provides that the issuance of the numberification imposing a tax shall be companyclusive evidence that the tax had been imposed in accordance with the provisions of the Act. But it was argued that as a matter of fact there was numbernotification imposing the tax and therefore the question of companyclusive evidence does number arise. This, in our opinion, is number established. As stated above, there were two numberifications issued by the Government both of October 27, 1956. One was published in the Gazette on October 30, 1956, and the other on the following day. The first numberification was as follows- No. 4963-5869-M-XIII.-In exercise of the pow- ers companyferred by sections 71, 76 and 85 of the Central Provinces and Berar Municipalities Act, 1922 11 of 1922 , the State Government are pleased to sanction the following draft rules for assessment, companylection and refund of the octroi tax within the limits of the Shegaon Municipality, in the Buldana District. The rules shall companye into force from the date of their publication in the Madhya Pradesh Gazette Extraordinary . And the second numberification stated- No. 4962-5869-M-XIII.-In exercise of the pow- ers companyferred by sub-section 2 of section 67 of the Central Provinces and Berar Municipalities Act, 1922 II of 1922 , the State Government are pleased to companyfirm the following draft rules for the imposition of the octroi tax within the limits of the SHEGAON MUNICIPAL COMMITTEE, in the Buldana district, under clause c of sub- s. 1 of section 66 of the said Act, on animals and goods brought for sale, expenditure or use in supersession of the rules of terminal tax, sanctioned under Notification No. 3716-B-VIII dated the 15th February, 1921. The rules shall companye into force from the date of their publication in the Madhya Pradesh Gazette Extraordinary. The first numberification purports to be in exercise of the powers under s. 71 which relates to Rules for assessment and for preventing evasion of assessment of taxes s. 76 which provides for companylection of taxes and s. 85 which relates to refunds. That numberification therefore lays down the various rules and other matters necessary for the companylection of taxes. The second numberification on the face of it is under sub-s. 2 of s. 67. It appears to us that this is a mistake and should have been under sub-a. 7 of s. 67. By this numberification the State Government companyfirmed the draft rules for the imposition of the octroi duty which in the companytext must mean imposition of the tax because the very first rule states- Rule 1 Octroi shall ordinarily be levied on companymodities included in the following classes and specified in the schedule hereto annexed and at the rates therein entered. The various classes of articles and companymodities on which octroi was to be levied are then set out and then the exceptions and explanations are given. With these rules are the schedules specifying the goods under each class which are liable to octroi duty and the rate at which the octroi duty was chargeable. This numberification therefore clearly is one which directs imposition of octroi and falls within sub- s. 7 of s. 67 and having been numberified in the Gazette it is companyclusive evidence of the tax having been imposed in accordance with the provisions of the Act and it cannot be challenged on the ground that all the necessary steps had number been taken.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 132 of 1954. Appeal by special leave from the judgment and order dated April 30, 1953, of the Circuit Bench of the Punjab High Court at Delhi in Civil Writ Application No. 314 of 1952. Ram Lal Anand and S. N. Anand, for the appellant. Ganpathy Iyer and R. H. Dhebar, for respondent No. 1. N. Grover and K. L. Mehta, for the respondent No. 2. 1957. March 7. The Judgment of the Court was delivered by IMAM J.--The respondent Jagan Nath filed a petition under Art. 226 of the Constitution in the Punjab High Court which was allowed. The High Court ordered the respondent The Union of India and the appellant Sohan Lal to forthwith restore possession of house No. 35 situated in West Patel Nagar, Delhi to Jagan Nath. Against this order of the High Court the appellant applied for and obtained special leave to appeal to this Court. Jagan Nath is a displaced person and a refugee from Pakistan. The Government of India had devised various schemes for the rehabilitation of refugees. One of these was a scheme for sale of certain houses companystructed by the Government of India for refugees in West Patel Nagar. It was number intended -under the scheme to entertain applications from displaced persons who had already been allotted agricultural land in East Punjab. A limited number of houses known as box-type tenements were companystructed. According to -he procedure prescribed in order to give effect to the scheme, only those displaced persons, who were registered before the 15th of August, 1948, and were gain- fully employed, were eligible for allotment of a house. A displaced person wishing to apply for allotment of a house was required to submit an application in the prescribed form offering to purchase a house in West Patel Nagar. If the applicant was prima facie eligible, he companyld be instructed to deposit the sale price of the house in the treasury, his eligibility to be verified later on Permission to deposit the sale price did number mean that his eligibility had been accepted. After payment of the sale price the applicant companyld be required to produce proof of his eligibility. A list would be prepared of all the applicants who had deposited the sale price and whose eligibility had been verified. If the number of the applicants was in excess of the available number of houses, those, whose treasury challans bore a later date, would be excluded and their money refunded. The applicants whose names were included in the final list would be required to pay the ground. rent by a specified date. A particular house would be allotted to an applicant by drawing lots. Jagan Nath had got himself registered as a refugee on December 31, 1947. He had made his application in the prescribed form. He had deposited the sum of Rs. 5,600 as the sale price after his prima facie eligibility had been accepted. He had also deposited the ground rent for the plot on which the house had been built, having been informed previously that it had been decided to allot him a two-roomed enclosed verandah box-type house in West Patel Nagar. He was informed that the allotment of a particular house would be decided by drawing lots at site on February 15, 1952, at 3 p.m. As the result of the drawing of lots, house No. 35, the property in dispute in this appeal, fell to his lot. According to Jagan Nath, on May 10, 1952, the Accommodation Officer in his absence removed the members of his family along with his entire belongings to the house in dispute in a truck and he and his family thus entered into possession of the house in dispute. Jagan Nath, however, was evicted from the house in dispute on September 27, 1952, by virtue of a warrant of eviction dated September 11, 1952, purporting to have been issued under s. 25 of Ordinance III of 1952. After his eviction,possession of the house in dispute was given to the appellant on October 3, 1952. The appellant, who is also a displaced person, had applied on February 27, 1952, for allotment of a house in West Patel Nagar. He had made the deposit of Rs. 5,600 as sale price and had apparently companyplied with all the necessary companyditions for allotment of a house to him and the house in dispute was allotted to him on July 31, 1952. The appellant has been in possession of the disputed house since October 3, 1952. The appellants main companytention has been that, having regard to the circumstances of the case, the High Court erred in making the order it did which presumably purported to be in the nature of a writ of mandamus. There was a serious dispute on questions of fact between the parties and also whether Jagan Nath had acquired in law any title to the property in dispute. Proceedings by way of a writ were number appropriate in a case where the decision of the Court would amount to a decree declaring Jagan Naths title and ordering restoration of possession. The proper remedy open to Jagan Nath was to get his title declared in the ordinary way in a Civil Court. The alternative remedy of obtaining relief by a writ of mandamus or an order in the nature of mandamus companyld only be had if the facts were number in dispute and Jagan Naths title to the property in dispute was clear. It was further companytended on behalf of the appellant that a writ of mandamus or an order in the nature of mandamus companyld number be made against the appellant, a private individual. He had companye into lawful possession and there was numberevidence of companylusion between him and the Union of India and there was numberfinding by the High Court that the appellant had acted in companylusion with the Union of India as a result of which Jagan Nath was dispossessed of the property in dispute and the same was allotted to him. On behalf of Jagan Nath, it was urged that when he entered into possession of the property in dispute he did number do so as a trespasser. He had been inducted on the property by the Accommodation Officer. He companyld number have been illegally evicted. S. 3 of the Public Premises Eviction Act, 1950 Act No. XXVII of 1950 , required a numberice to be served upon him directing him to vacate the premises within 15 days from the date of the service of the numberice upon him before he companyld be evicted. This was number done and he had been evicted without companyplying with the mandatory provisions of a. 3 of the said Act. His eviction was a high-handed act of the Government without any legal justification whatsoever. The Union of India which had illegaly evicted him should be ordered to restore possession of the property in dispute to him and as the eviction was at the instance of the appellant, he should also be directed to restore possession of the said property to Jagan Nath. Reliance was placed upon certain decisions of the High Courts of Punjab in Khushal Singh v. Shri Rameshwar Dayal, Deputy Commissioner, Delhi 1 , Hyderabad in G. Kistareddy v. Commr. of City Police, Hyderabad 2 and Pepsu in Mohinder Singh v. State of Pepsu 1 , as well as certain observations in the judgment of this Court in the case of Wazir Chand v. The state of Himachal Pradesh 4 in support of the proposition that, as Jagan Nath was in possession and he had been illegally evicted, he was entitled to have property, from which he had been illegally evicted, restored to him. We do number propose to enquire into the merits of the rival claims of title to the property in dispute set up by the appellant and Jagan Nath. If we were to do so, we would be entering into a field of investigation which is more appropriate for a Civil Court in a properly companystituted suit to do rather than for a Court exercising I.L.R. 1954 Punjab 211. A.I.R. 1952 Hyderabad 36. A.I.R. 1955 Pepsu 60. 4 1955 S.C.R. 408. C.R. 743 the prerogative of issuing writs. There are questions of fact and law which are in dispute requiring determination before the respective claims of the parties to this appeal can be decided. Before the property in dispute can be restored to Jagan Nath it will be necessary to declare that he had title in that property and was entitled to recover possession of it. This would in effect amount to passing a decree in his favour. In the circumstances to be mentioned hereafter, it is a matter for serious companysideration whether in proceedings under Art. 226 of the Constitution such a declaration ought to be made and restoration of the property to Jagan Nath be ordered. Jagan Nath had entered into a transaction with the Union of India upto a certain stage with respect to the property in dispute, but numberletter of allotment had been issued him. Indeed, he had been informed, when certain facts became known, that the property in question companyld number be allotted to him as he was a displaced person who had been allotted land in East Punjab. As between Jagan Nath and the Union of India it will be necessary to decide what rights were acquired by the former in the property upto the stage when the latter informed Jagan Nath that the property would number be allotted to him. Another question for decision will be whether Jagan Nath was allowed to enter into possession of the property because it was allotted to him or under a misapprehension as the Union of India was misled by the companytents of his application. The case of the Union of India is that under the scheme Jagan Nath was number eligible for allotment of a house in West Patel Nagar, as it was subsequently discovered that he had been allotted, previous to his application, agricultural land in the District of Hissar. Being satisfied that Jagan Nath was number eligible for allotment, the Union of India refused to allot to him the tenement No. 35, West Patel Nagar and allotment of that house was made to the appellant who was found to be eligible in every way. The appellant was accordingly given possession of the property after Jagan Naths eviction. The appelant had companyplied with all the companyditions imposed by the Union of India and a letter of allotment was actually issued to him and he entered into possession of the property in dispute under the authority of the Union of India. Did the appellant thereby acquire a legal right to hold the property as a against Jagan Nath? In our opinion, all these questions should be decided in a properly companystituted suit in a Civil Court rather than in proceedings under Art. 226 of the Constitution. The eviction of Jagan Nath was in companytravention of the express provisions of s. 3 of the Public Premises Eviction Act. His eviction, therefore, was illegal. He was entitled to be evicted in due companyrse of law and a writ of mandamus companyld issue to or an order in the nature of mandamus companyld be made against the Union of India to restore possession of the property to Jagan Natb from which he had been evicted the property was still in the possession of the Union of India. The property in dispute, however, is in possession of the appellant. There is numberevidence and numberfinding of the High Court that the appellant was in companylusion with the Union of India or that he had knowledge that the eviction of Jagan Nath was illegal. Normally, a writ of mandamus does number issue to or an order in the nature of mandamus is number made against a private individual. Such an order is made against a person directing him to do some particular thing, specified in the order, which appertains to his office and is in the nature of a public duty Halsburys Laws of England Vol. 11, Lord Simonds Edition, p. 84 . If it had been proved that the Union of -India and the appellant had companyluded, and the transaction between them was merely companyourable, entered into with a view to deprive Jagan Nath of his rights, jurisdiction to issue a writ to or make an order in the nature of mandamus against the appellant might be said to exist in a Court. We have number been able to find a direct authority to companyer a case like the one before us, but it would appear that so far as election to an office is companycerned, a mandamus to restore, admit, or elect to an office will number be granted unless the office is vacant. If the office is in fact full, proceedings must be taken by way of injunction or election petition to oust the party. in possession and that a mandamus will go only on the supposition that there is numberody holding the office in question. In R. v. Chester Corporation 1 it was held that it is an inflexible rule of law that where a person has been de facto elected to a companyporate office, and has accepted and acted in the office, the validity of the election and the title to the office can only be- tried by proceeding on a quo warranto information. A mandamus will number lie unless the election can be shown to be merely companyourable. We cannot see why in principle there should be a distinction made between such a case and the case of a person, who has, apparently, entered into bona fide possession of a property without knowledge that any person had been illegally evicted therefrom. In our opinion, the High Court erred in allowing the application of Jagan Nath filed under Art. 226 of the Constitution and making the order it did. The appeal is accordingly allowed and the order of the High Court is set aside.

Case appeal was accepted by the Supreme Court

ORIGINAL JURISDICTION Writ Petitions Nos. 78-80, 93 and 152 of 1956. Petitions under Article 32 of the Constitution of India for the enforcement of Fundamental Rights. Sir N. P. Engineer, N. A. Palkhivala, R. A. Gagrat and G. Gopalakrishnan, for the petitioners in Petitions Nos. 78, 79 and 80 of 1956. Ganpat Rai, for the petitioner in petition No. 93 of 1956. C. Jain and B. P. Maheshwari, for the petitioner in Petition No. 152 of 1956. K. Daphtary, Solicitor-General of India, Porus A. Mehta and R. H. Dhebar, for the respondent No. 1 in Petitions Nos. 78/56 and 152/56 and Respondents in Petitions Nos. 79, 80 and 93 of 1956. R. Ethirajulu Naidu, Advocate-General, Mysore, Porus A. Mehta and T. M. Sen, for respondent No. 2 in Petition No. 78 of 1956. April 9. 1957. The Judgment of the Court was delivered by VENKATARAMA AIYAR J.-Pursuant to resolutions passed by the legislatures of several States under Art. 252, el. 1 of the Constitution, Parliament enacted Prize Competitions Act, 42 of 1955 , hereinafter referred to as the Act, and by a numberification issued on March 31, 1956, the Central Government brought it into force on April 1, 1956. The petitioners before us are engaged in promoting and companyducting prize companypetitions in different States of India, and they have filed the present petitions under Art. 32 questioning the validity of some of the provisions of the Act and the rules framed thereunder. It will be companyvenient first to refer to the provisions of the Act and of the rules, so far as they are material for the purpose of the present petitions. The object of the legislation is, as stated in the short title and in the preamble, to provide for the companytrol and regulation of prize companypetitions . Section 2 d of the Act defines prize companypetition as meaning any companypetition whether called a cross-word prize companypetition, a missing-word prize companypetition, a picture prize companypetition or by any other name , in which prizes are offered for the solution of any puzzle based upon the building up, arrangement, companybination or permutation of letters, words or figures . Sections 4 and 5 of the Act are-. the provisions which are impugned as unconstitutional, and they are as follows No person shall promote or companyduct any prize companypetition or companypetitions in which the total value of the prize or prizes whether in cash or otherwise to be offered in any month exceeds one thousand rupees and in every prize companypetition, the number of entries shall number exceed two thousand. Subject to the provisions of section 4, numberperson shall promote any prize companypetition or companypetitions in which the total value of the prize or prizes whether in cash or otherwise to be offered in any month does number exceed one thousand rupees unless he has obtained in this behalf a licence granted in accordance with the provisions of this Act and the rules made thereunder. Then follow provisions as to licensing, maintaining of accounts and penalties for violation thereof. Section 20 companyfers power on the State Governments to frame rules for carrying out the purpose of the Act. In exercise of the powers companyferred by this section, the Central Government has framed rules for Part C States, and they have been, in general, adopted by all the States. Two of these rules, namely, rules 11 and 12 are impugned by the petitioners as unconstitutional, and they are as follows Entry fee- 1 Where an entry fee is charged in respect of a prize companypetition, such fee shall be paid in money only and number in any other manner. The maximum amount of an entry fee shall number exceed Re. I where the total value of the prize or prizes to be offered is rupees one thousand but number less than rupees five hundred and in all other cases the maximum amount of an entry fee shall be at the following rates, namely- a as 8 where the total value of the prize or prizes to be offered is less than rupees five hundred but number less than rupees two hundred and fifty and b as. 4 where the total value of the prize or prizes to be offered is less than rupees two hundred and fifty. Maintenance of Register.-Every licensee shall maintain in respect of each prize companypetition for which a licence has been granted a register in Form C and shall, for the purpose of ensuring that number more than two thousand entries are received for scrutiny for each such companypetition, take the following steps, that is to say,shall- a arrange to receive all the entries only at the place of business mentioned in the license b serially number the entries according to their order of receipt c post the relevant particulars of such entries in the register in Form C as and when the entries are received and in any case number later than the close of business on each day and d accept for scrutiny only the first two thousand. entries as they appear in the register in Form C and ignore the remaining entries, if any, in cases where numberentry fee is charged and refund the entry fee received in respect of the entries in excess of the first two thousand to the respective senders thereof in cases where an entry fee has been charged after deducting the, companyt if any of refund. Now, the companytention of Mr. Palkhiwala, who addressed the main argument in support of the petitions, is that prize companypetition as defined in s. 2 d would include number only companypetitions in which success depends on chance but also those in which it would depend to a substantial degree on skill that the companyditions laid down in ss. 4 and 5 and rr. II and 12 are wholly unworkable and would render it impossible to run the companypetition, and that they seriously encroached on the fundamental right of the petitioners to carry on business that they companyld number be supported under Art. 19 6 of the Constitution as they were unreasonable -and amounted, in effect, to a prohibition and number merely a regulation of the business that even if the provisions companyld be regarded as reasonable restrictions as regards companypetitions which are in the nature of gambling, they companyld number be supported as regards companypetitions wherein success depended to a substantial extent on skill, and that as the impugned law companystituted a single inseverable enactment, it must fail in its entirety in respect of both classes of companypetitions. Mr. Seervai who appeared for the respondent, disputes the companyrectness of these companytentions. He argues that prize companypetition as defined in s. 2 d of the Act, properly companystrued, means and includes only companypetitions in which success does number depend to any substantial degree on skill and are essentially gambling in their character that gambling activities are number trade or business within the meaning of that expression in Art. 19 1 g , and that accordingly the petitioners are number entitled to invoke the protection of Art. 19 6 and that even if the definition of prize companypetition in s. 2 d is wide enough to include companypetitions in which success depends to a substantial degree on skill and ss. 4 and 5 of the Act and rr. 11 and 12 are to be struck down in respect of such companypetitions as unreasonable restrictions number protected by Art. 19 6 , that would number affect the validity of the enactment as regards the companypetitions which are in the nature of gambling, the Act being severable in its application to such companypetitions. These petitions were heard along with Civil Appeal No. 134 of 1956, wherein the validity of the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948 was impugned on grounds some of which are raised in the present petitions. In our judgment in that appeal, we have held that trade and companymerce protected by Art. 19 1 g and Art. 301 are only those activities which companyld be regarded as lawful trading activities, that gambling is number trade but res extra companymercium, and that it does number fall within the purview of those Articles. Following that decision, we must hold that as regards gambling companypetitions, the petitioners before us cannot seek the protection of Art. 19 1 g , and that the question whether the restrictions enacted in ss. 4 and 5 and rr. 11 and 12 are reasonable and in the interest of the public within Art. 19 6 does number therefore arise for companysideration. As regards companypetitions which involve substantial skill, however, different companysiderations arise. They are business activities, the protection of which is guaranteed by Art. 19 1 g , and the question would have to be determined with reference to those companypetitions whether ss. 4 and 5 and rr. 1 1 and 12 are reasonable restrictions enacted in public interest. But Mr. Seervai has fairly companyceded before us that on the materials on record in these proceedings, he companyld number maintain that the restrictions companytained in those provisions are saved by Art. 19 6 as being reasonable and in the public interest. The ground being thus cleared, the only questions that survive for our decision are 1 whether, on the definition of prize companypetition in s.2 d , the Act applies to companypetitions which involve substantial skill and are number in the nature of gambling and 2 if it does, whether the provisions of ss. 4 and 5 and rr. II and 12 which are, ex companycessi void, as regards such companypetitions, can on the principle of severability be enforced against companypetitions which are in the nature of gambling. If the question whether the Act applies also to prize companypetitions in which success depends to a sub stantial degree on skill is to be answered solely on a literal companystruction of s. 2 d , it will be difficult to resist the companytention of the petitioners that it does. The definition of prize companypetition in s. 2 d is wide and unqualified in its terms. There is numberhing in the wording, of it, which limits it to companypetitions in which success does number depend to any substantial extent on skill but on chance. It is argued by Mr. Palkhiwala that the language of the enactment being clear and unambiguous, it is number open to us to read into it a limitation which is number there, by reference to other and extraneous companysiderations. Now, when a question arises as to the interpretation to be put on an enactment, what the companyrt has to do is to ascertain the intent of them that make it, and that must of companyrse be gathered from the words actually used in the statute. That, however, does number mean that the decision should rest on a literal interpretation of the words used in disregard of all other materials. The literal companystruction then, says Maxwell on Interpretation of Statutes, 10th Edn., p. 19, has, in general, but prima facie preference. To arrive at the real meaning, it is always necessary to get an exact companyception of the aim, scope and object of the whole Act to companysider, according to Lord Coke 1. What was the law before the Act was passed 2 What was the mischief or defect for which the law had number provided 3 What remedy Parliament has appointed and 4 . The reason of the remedy. The reference here is to Heydons case 1 . These are principles well settled, and were applied by this Court in The Bengal Immunity Company Limited v. The State of Bihar and others 2 . To decide the true scope of the present Act, therefore, we must have regard to all such factors as can legitimately be taken into account in ascertaining the intention of the legislature, such as the history of the legislation and the purposes thereof, the mischief which it intended to 1 1584 3 W. Rep. 16 76 E.R. 637. 2 1955 2 S.C.R. 603, 633. suppress and the other provisions of the statute, and companystrue the language of s. 2 d in the light of the indications furnished by them. Turning first to the history of the legislation, its genesis is to be found in the Bombay Lotteries and, Prize Competitions Control and Tax Act Bom. LIV of 1948 . That Act was passed with the object of companytrolling and taxing lotteries and prize companypetitions within the Province of Bombay, and as originally enacted, it applied only to companypetitions companyducted within the Province of Bombay. Section 7 of the Act provided that a prize companypetition shall be deemed to be an unlawful prize companypetition unless a licence in respect of such companypetition has been obtained by the promoter thereof. Section 12 imposed a tax on the amounts received in respect of companypetitions which had been licensed under the Act. With a view to avoid the operation of the taxing provisions of this enactment, persons who had there to before been companyducting prize companypetitions within the Province of Bombay shifted the venue of their activities to neighbouring States like Mysore, and from there companytinued to receive entries and remittances of money therefor from the residents of Bombay State. In order to prevent evasion of the Act and for effectually carrying out its object, the legislature of Bombay passed Act XXX of 1952 extending the provisions of the Act of 1948 to companypetitions companyducted outside the State of Bombay but operating inside it, the tax however being limited to the amounts remitted or due on the entries sent from the State of Bombay. The validity of this enactment was impugned by a number of promoters of prize companypetitions in proceedings by way of writ in the High Court of Bombay, and dealing with the companytentions raised by them, Chagla C.J. and Dixit J. who heard the appeals arising from those proceedings, held that the companypetitions in question were gambling in character, and that the licensing provisions were according valid but that the taxes imposed by ss. 12 and 12-A of the Act were really taxes on the carrying on of the business of running prize companypetitions, and were hit by Art. 301 of the Constitution, and were therefore bad. it is against this decision that Civil Appeal No. 134 of 1956, already referred to, was directed. The position created by this judgment was that though the States companyld regulate the business of running companypetitions within their respective borders, to the extent that it had ramifications in other States they companyld deal with it effectively only by joint and companycerted action among themselves. That precisely is the situation for which Art. 252 1 provides. Accordingly, following on the judgment of the Bombay High Court, the States of Andhra, Bombay, Madras, Orissa, Uttar Pradesh, Hyderabad, Madhya Bharat, Patiala and East Punjab States Union and Saurashtra passed resolutions under Art. 252 1 of the Constitution authorising Parliament to enact the requisite legislation for the companytrol and regulation of prize companypetitions. Typical of such resolutions is the one passed by the legislature of Bombay, which is in these terms This Assembly do resolve that it is desirable that companytrol and regulation of -prize puzzle companypetitions and all other matters companysequential and incidental thereto in so far as these matters are companycerned with respect ,to which Parliament has numberpower to make laws for the States, should be regulated by Parliament by law. It was to give effect to these resolutions that Parliament passed the Act number under companysideration, and that fact is recited in the preamble to the Act. Having regard to the circumstances under which the resolutions came to be passed, there cannot be any reasonable doubt that the law which the State legislatures moved Parliament to enact under Art. 252 1 was one to companytrol and -regulate prize companypetitions of a gambling character. Competitions in which success depended substantially on skill companyld number have been in the minds of the legislatures which passed those resolutions. Those companypetitions had number been the subject of any companytroversy in companyrt. They had done numberharm to the public and bad presented numberproblems to the States, and at numbertime had there been any legislation directed to regulating them. And if the State legislatures felt that there was any need to regulate even those companypetitions, they companyld have themselves effectively done so without resort to the special jurisdiction under Art. 252 1 . It should further be observed that the language of the resolutions is that it is desirable to companytrol company- petitions. If it was intended that Parliament should legislate also on companypetitions involving skill, the word, ,control would seem to be number appropriate. While companytrol and regulation would be requisite in the case of gambling, mere regulation would have been sufficient as regards companypetitions involving skill. The use of the word companytrol which is to be found number only in the resolution but also in the short title and the preamble to the Act appears to us to clearly indicate that it was only companypetitions of the character dealt with in the Bombay judgment, that were within the companytemplation of the legislature. Our attention was invited by Mr. Seervai to the statement of objects and reasons in the Bill introducing the enactment. It is therein stated that the proposed legislation falls under Entry 34 of the State List, viz., Betting and gambling. If we companyld legitimately rely on this, that would be companyclusive against the petitioners. But Mr. Palkhiwala companytends, and rightly, that the Parliamentary history of the enactment is number admissible to companystrue its meaning, and Mr. seervai also disclaims any intention on his part to use the statement of objects and reasons to explain s. 2 d . We must accordingly exclude it from our companysideration. But even apart from it, having regard to the history of the legislation, the declared object thereof and the wording of the statute, we are of opinion that the companypetitions which are sought to be companytrolled and regulated by the Act are only those companypetitions in which success does number depend to any substantial degree on skill. Assuming, however, that prize companypetitions as defined in s. 2 d include those in which success depends to a substantial degree on skill as well as those in which it does number so depend, the question then arises for determination whether ss. 4 and 5 of the Act and rr. 11 and 12 are void number merely in their application to the former-as to which there is numberdispute-, but also the latter. Mr. Palkhiwala companytends that they are, because, he argues, the rule as to severability of statutes can apply only when the impugned legislation is in excess of legislative companypetence as regards subjectmatter and number when it is in violation of companystitutional prohibitions, and further because the impugned provisions are one and indivisible. On the other hand, Mr. Seervai for the respondent companytends that the principle of severability is applicable when a statute is partially void for whatever reason that might be, and that the impugned provisions are severable and therefore enforceable as against companypetitions which are of a gambling character. It is on the companyrectness of these companytentions that we have to pronounce. The question whether a statute which is void in part is to be treated as void in toto, or whether it is capable of enforcement as to that part which is valid is one which can arise only with reference to laws enacted by bodies which do number possess unlimited powers of legislation, as, for example, the legislatures in a Federal Union. The limitation on their powers may be of two kinds It may be with reference to the subject-matter on which they companyld legislate, as, for example, the topics enumerated in the Lists in the Seventh Schedule in the Indian Constitution, ss. 91 and 92 of the Canadian Constitution, and s. 51 of the Australian Constitution or it may be with reference to the character of the legislation which they companyld enact in respect of subjects assigned to them, as for example, in relation to the fundamental rights guaranteed in Part III of the Constitution and similar companystitutionally protected rights in the American and other Constitutions. When a legislature whose authority is subject to limitations aforesaid enacts a law which is wholly in excess of its powers, it is entirely void and must be companypletely ignored. But where the legislation falls in part within the area allotted to it and in part outside it, it is undoubtedly void as to the latter but does it on that account become necessarily void in its entirety? The answer to this question must depend on whether what is valid companyld be separated from what is invalid, and that is a question which has to be decided by the companyrt on a companysideration of the provisions of the Act. This is a principle well established in American Jurisprudence, Vide Cooleys Constitutional Limitations, Vol. 1, Chap. VII, Crawford on Statutory Construction, Chap. 16 and Sutherland on Statutory Construction, 3rd Edn, Vol. 2, Chap. 24. It has also been applied by the Privy Council in deciding on the validity, of laws enacted by the legislatures of Australia and Canada, Vide Attorney-General for the Commonwealth of Australia v. Colonial Sugar Refining Company Limited 1 and Attorney- General for Alberta v. Attorney-General for Canada 1 . It was approved by the Federal Court in In re Hindu Womens Rights to Property Act 3 and adopted by this Court in The State of Bombay and another v. F. N. Balsara 4 and The State of Bombay v. The United Motors India Ltd., and others 1 . These decisions are relied on by Mr. Seervai as being decisive in his favour. Mr. Palkhiwala disputes this position, and maintains that on the decision of the Privy Council in Punjab Province v. Daulat Singh and others 6 and of the decisions of this Court in Romesh Thappar v. State of Madras 7 and Chintaman Rao v. State of Madhya Pradesh 8 , the question must be answered in his favour. We must number examine the precise scope of these decisions. In In re Hindu Womens Rights to property Act 3 , the question arose with reference to the Hindu Womens Rights to Property Act XVIII of 1937. That was an Act passed by the Central Legislature, and had companyferred on Hindu widows. certain rights over properties which devolved by intestate succession and survivorship. While the subject of devolution was within the companypetence of the Centre under Entry 7 in List III, that was limited to property other than agricultural land, which was a subject within the, exclusive companypetence of the Provinces under Entry 21 in List 11. Act No. XVIII of 1937, dealt generally with property, and the companytention raised was that being admittedly incompetent and ultra vires as regards agricultural lands, it was void in its entirety. 1 1914 A.C. 237. 5 1953 S.C.R. 1069. L.R. 1947 A.C. 503. 6 1946 F.C.R. 1. 3 1941 F.C.R. 12. 7 1950 S.C.R. 594. 4 1951 S.C.R. 682. 8 1950 S.C.R. 759. It was held by the Federal Court that the Central Legislature must, on the principle laid down in Macleod v. Attorney-General for New, South Wales 1 , be presumed to have known its own limitations and must be held to have intended to enact only laws within its companypetence, that accordingly the word I property in Act No. XVIII of 1937 must be companystrued as property other than agricultural land, and that, in that view, the legislation was wholly intra vires. It is companytended by Mr. Palkhiwala that this decision does number proceed on the basis that the Act is in part ultra vires and that the remainder however companyld be separated therefrom, but on the footing that the Act is in its entirety intra vires, and that thus, numberquestion of severability was decided. That is true but that the principle of severability had the approval of that Court clearly appears from the following observations of Sir Maurice Gwyer C. J. It should number however be thought that the Court has overlooked cases cited to it in which the same words have been applied in an Act to a number of purposes, some within and some without the power of the Legislature, and the whole Act hag been held to be bad. If the restriction of thegeneral words to purposes within the power of the Legislature would be to leave an Act with numberhing or next to numberhing in it, or an Act different in kind, and number merely in degree, from an Act in which the general words were given the wider meaning, then it is plain that the Act as a whole must be held invalid, because in such circumstances it is impossible to assert with any companyfidence that the Legislature intended the general words which it has used to be companystrued only in the narrower sense. If the Act -is to be upheld, it must remain, even when a narrower meaning is given to the general words, an Act which is companyplete, intelligible and valid and which can be executed by itself Wynes Legislative and Executive Powers in, Australia, p. 51, citing Presser v. Illinois 2 . There is numberhing in these observations to. support the companytention of the petitioners that the doctrine of severability applies only when the legislation is in 1 1891 A.C. 455. 2 1886 116 U.S. 252. excess of the companypetence of the legislature quoad its subject-matter, and number when it infringes some companystitutional prohibitions. In The State of Bombay and another v. F. N. Balsara 1 the question was as to the validity of the Bombay Prohibition Act. Sections 12 and 13 of the Act imposed restrictions on the possession, companysumption and sale of liquor, which had been defined in s. 2 24 of the Act as including a spirits of wine, methylated spirits, wine, beer, toddy and all liquids companysisting of or companytaining alcohol, and b any other intoxicating substance which the Provincial Government may, by numberification in the Official Gazette, declare to be liquor for the purposes of this Act . Certain medicinal and toilet preparations had been declared liquor by numberification issued by the Government under s. 2 24 b . The Act was attacked in its entirety as violative of the rights protected by Art. 19 1 f but this Court held that the impugned provisions were unreasonable and therefore void in so far as medicinal and toilet preparations were companycerned, but valid as to the rest. Then, the companytention was raised that as the law purports to authorise the imposition of a restriction on a fundamental right in language wide enough to companyer restrictions both within and without the limits of companystitutionally permissible legislative action affecting such right, it is number possible to uphold it even so -far as it may be applied within the companystitutional limits, as it is number severable . In rejecting this companytention, the Court observed at pp. 717-718 These items being thus treated separately by the legislature itself and being severable, and it number being companytended, in view of the directive principles of State policy regarding prohibition, that the restrictions imposed upon the right to possess or sell or buy or companysume or use those categories of properties are unreasonable, the impugned sections must be held valid so far as these categories are companycerned. This decision is clear authority that the principle of severability is applicable even when the partial 1 1951 S.C.R. 682. invalidity of the Act arises by reason of its companytravention of companystitutional limitations. It is argued for the petitioners that in that case the legislature had through the rules framed under the statute classified medicinal and toilet preparations as a separate category, and had thus evinced an intention to treat them as severable, that numbersimilar classification had been made in the present Act, and that therefore the decision in question does number help the respondent. But this is to take too narrow a view of the decision. The doctrine of severability rests, as will presently be shown, on a presumed intention of the legislature that if a part of a statute turns out to be void, that should number affect the validity of the rest of it, and that that intention is to be ascertained from the terms of the statute. It is the true nature of the subject-matter of the legislation that is the determining factor, and while a classification made in the statute might go far to support a companyclusion in favour of severability, the absence of it does number necessarily preclude it. It is a feature usual in latterday legislation in America to enact a clause that the invalidity of any part of the law shall -not render the rest of it void, and it has been held that such a clause furnishes only prima facie evidence of severability, which must in the last resort be decided on an examination of the provisions of the statute. In discussing the effect of a severability clause, Brandies J. observed in Dorchy v. State of Kansas 1 that it provides, a rule of companystruction, which may sometimes aid in determining that intent. But it is an aid merely number an inexorable companymand. The weight to be attached to a classification of subjects made in the statute itself cannot, in our opinion, be greater than that of a severability clause. If the decision in The State of Bombay and another v. F. N. Balsara 2 is examined in the light of the above discussion, it will be seen that while there is a reference in the judgment to the fact that Medicinal and toilet preparations are treated separately by the legislature, that is followed by an independent finding that they are severable. In other words, the decision as to severability was reached on 1 1924 264 U.S. 286 68 L. Ed. 686, 690. 2 1951 S.C.R. 682. the separability in fact of the subjects dealt with by the legislation and the classification made in the rule merely furnished support to it. Then, there are the observations of Patanjali Sastri C.J. in The State of Bombay v. The United Motors India Ltd. 1 . Dealing with the companytention that a law authorising the imposition of a tax on sales must be declared to be wholly void because it was bad in part as transgressing companystitutional limits, the learned Chief Justice observed at p. 1099 It is a sound rule to extend severability to include separability in enforcement in such cases, and we are of opinion that the principle should be applied in dealing with taxing statutes in this companyntry. The petitioners companytend that the rule of severability in enforcement laid down in the above passage following the decision in Bowman v. Continental Co. 2 is companyfined in American law to taxing statutes, that it is really in the nature of an exception to the rule against severability of laws which are partially unconstitutional, and that it has numberapplication to the present statute. We are unable to find any basis for this argument in the American authorities. That the decision in Bowmans case 2 related to a taxing statute is numberground for limiting the principle enunciated therein to taxing statutes. On the other hand, the discussion of the law as to severability in the authoritative text-books shows that numberdistinction is made in American Jurisprudence between taxing statutes and other statutes. Corpus Juris Secundum, Vol. 82, dealing with the subject of severability, states first the principles applicable generally and to all statutes, and then proceeds to companysider those principles with reference to different topics, and taxation laws form one of those topics. We have number to companysider the decisions in Punjab Province Daulat Singh and others 3 , Romesh Thappar v. State of Madras 4 and chintaman Rao v. State of Madhya Pradesh 5 relied on by the petitioners. In Punjab Province v. Daulat Singh and others 3 , the 1 1953 S.C.R. 1069 at 1098-99. 3 1946 F.C.R. 1. 2 1921 256 U.S. 642 65 L. Ed. II37. 4 1950 C.R. 594. 5 1950 S.C.R. 759. challenge was on the validity of s. 13A which had been introduced into the Punjab Alienation of Land Act XIII of 1900 by an Amendment Act X of 1938. That section enacted that an alienation of land by a member of an agricultural tribe in Punjab in favour of another member of the tribe made either before or after the companymencement of the amendment Act was void for all purposes, when the real beneficiary under the transaction was number a member of the tribe. Section 4 of the Act had empowered the local Government to determine by numberification the body or group of persons who are to be declared to be agricultural tribes for the purpose of the Act. A numberification dated April 18, 1904 issued under that section provided that, In each district of the Punjab mentioned in companyumn I of the Schedule attached to this numberification, all persons either holding land or ordinarily residing in such district and belonging to any one of the tribes mentioned opposite the name of such district, in companyumn 2, shall be deemed to be an agricultural tribe within the district. The question was whether s. 13A was void as companytravening s. 298 1 of the Government of India Act, 1935, which provided inter alia that numbersubject of His Majesty domiciled in India shall on grounds only of descent be prohibited from acquiring, holding or disposing of property. It was held by the Federal Court that s. 13A was void as infringing s. 298 1 to the extent that it prohibited alienation on ground of descent, but that it was valid in so far as it related to a prohibition of the transaction in favour of a person who belonged to the tribe but did number hold land or ordinarily reside in the district, as a prohibition on that ground was number within s. 298 1 and that accordingly an enquiry should be made as to the validity of the impugned alienation with reference to the qualifications of the alienee. Vide Punjab Province v. Daulat Singh 1 . Before the Privy Council, Mr. Privy, companynsel for the appellant, companyceded that membership of a tribe was generally a question of descent , and the Board accordingly held that s. 13A wag repugnant to a. 298 1 1 1942 F.C. R. 67. and was void. Dealing next with the enquiry which was directed by the Federal Court as to the qualifications of the alienee, the Privy Council observed as follows at p. 20 The majority of the Federal Court appear have companytemplated another form of severability namely, by a classification of the particular cases or which the impugned Act may happen to operate, involving an inquiry into the circumstances of each individual case. There are numberwords in the Act capable of being so companystrued, and such a companyrse would in effect involve an amendment of the Act by the companyrt, companyrse which is beyond the companypetency of the companyrt, as has long been well established. It will be numbericed that, in the above case, there was numberquestion of the application of the Act to different categories which were distinct and severable either in fact or under the provisions of the Act. The numberification issued under s. 4 on which the judgment of the Federal Court was based did number classify those who did number belong to the tribe and those who did number hold property or reside in the district as two distinct groups. It described only one category, and that had to satisfy both the companyditions. To break up that category into two distinct groups was to go against the express language of the enactment and to substitute the word for and. The Privy Council held that that companyld number be done, and it also observed that the severability companytemplated in the judgment of the Federal Court was an ad hoc determination with reference to qualifications of each alienee as distinguished from a distinct category with reference to the subject-matter. This is number an authority for the position that if the subject-matter of what is valid is severable from that of what is invalid, even then, the Act must be held to be wholly void. More to the point are the following observations at pp. 19-20 on a question which was also raised in that case whether s. 13A which avoided the alienations made both before and after the Act, having been held to be void in so far as it was retrospective, was void in toto If the retrospective element were number severable from the rest of the provisions, it is established beyond companytroversy that the whole Act would have to be declared ultra vires and void. But, happily, the retrospective element in the impugned Act is easily Severable and by the deletion of the words either before or from the early part of sub-s. 1 of the new 3. 13A, enacted by s. 5 of the impugned Act, the rest ,if the provisions of the impugned Act may be left to operate validly. Discussing this decision in The State of Bombay v. The United Motors India Ltd. 1 , Patanjali Sastri C.J. observed at p. 1098 The subject of the companystitutional prohibition was single and indivisible, namely, disposition of property on grounds only of among other things descent and if, in its actual operation, the impugned statute was found to transgress the companystitutional mandate, the whole Act had to be held void as the words used companyered both what was companystitutionally permissible and what was number. That is to say, the numberification issued under s. 4 was single and indivisible, and therefore it was number severable. Agreeing with this opinion, we are of opinion that the decision in Punjab Province v. Daulat Singh 2 cannot, in view of the decision of this Court in The State of Bombay v. N. Balsara 3 , be accepted as authority for the position that there companyld be numberseverability, even if the subject- matters are, in fact, distinct and severable. In Romesh Thappar v. State of Madras 4 , the question was as to the validity of s. 9 1-A of the Madras Maintenance of Public Order Act XXIII of 1949. That section authorised the Provincial Government to prohibit the entry and circulation within the State of a newspaper for the purpose of securing the public safety or the maintenance of public order. Subsequent to the enactment of this statute, the Constitution came into force, and the validity of the impugned provision depended on whether it was protected by Art. 19 2 which saved existing law in so far as it relates to any matter which undermines the security 1 1953 S.C.R. 1069. 3 1951 S.C.R. 682. 2 1946 F.C.R. 1. 4 1950 S.C.R. 594. of or tends to overthrow the State. It was held by this Court that as the purposes mentioned in s. 9 1-A of the Madras Act were wider in amplitude than those specified in Art. 19 2 , and as it was number possible to split up s. 9 1-A into what was within and what was without the protection of Art. 19 2 , the provision must fail in its entirety. That is really a decision that the impugned provision was on its own companytents inseverable. It is number an authority for the position that even when a provision is severable, it must be struck down on the ground that the principle of severability is inadmissible when the invalidity of a statute arises by reason of its companytravening companystitutional prohibitions. It should be mentioned that the decision in Romesh Thappar v. State of Madras 1 was referred to in The State of Bombay F. N. Balsara 2 and The State of Bombay v. The United Motors India Ltd. 3 and distinguished. In Chintaman Rao v. State of Madhya Pradesh 4 , the question related to the companystitutionality of s. 4 2 of the Central Provinces and Berar Regulation of Manufacturers of Bidis Agricultural Purposes Act No. LXIV of 1948, which provided that, No person residing in a village specified in such order shall during the agricultural season engage himself in the manufacture of bidis, and numbermanufacturer shall during the said season employ any person for the manufacture of bidis . This Court held that the restrictions imposed by s. 4 2 were in excess of what was requisite for achieving the purpose of the Act, which was to provide measures for the supply of adequate labour for agricultural purposes in bidi manufacturing areas , that that purpose companyld have been achieved by limiting the restrictions to agricultural labour and to defined hours, and that, as it stood, the impugned provision companyld number be upheld as a reasonable restriction within Art. 19 1 g . Dealing next with the question of severability, the Court observed at p. 765 that, The law even to the extent that it companyld be said to authorise the imposition of restrictions in regard to 1 1950 S.C.R. 594. 3 1953 S.C.R. 1069. 2 1951 S.C.R. 682. 4 1950 S.C.R. 759. 1222 agricultural labour cannot be held valid because the language employed is wide enough to companyer restrictions both within and without the limits of companystitutionally permissible legislative action affecting the right. Now, it should be numbered that the impugned provision, a. 4 2 , is by its very nature inseverable, and it companyld number be enforced without re-writing it. The observation aforesaid must be read in the companytext of the particular provision which was under companysideration. This really is numberhing more than a decision on the severability of the particular provision which was impugned therein, and it is open to the same companyment as the decision in Romesh Thappar v. State of Madras 1 . That was also one of the decisions distinguished in The, State, of Bombay v. F. N. Balsara 2 . The resulting position may thus be stated When a statute is in part void, it will be enforced as regards the rest, if that is severable from what is invalid. It is immaterial for the purpose of this rule whether the invalidity of the statute arises by reason of its subject-matter being outside the companypetence of the legislature or by reason of its provisions companytravening companystitutional prohibitions. That being the position in law, it is number necessary to companysider whether the impugned provisions are severable in their application to companypetitions of a gambling character, assuming of companyrse that the definition of 1 prize companypetition in s. 2 d is wide enough to include also companypetitions involving skill to a substantial degree, It will be useful for the determination of this question to refer to certain rules of companystruction laid down by the American Courts, where the question of severability has been the subject of companysideration in numerous authorities. They may be summarised as follows In determining whether the valid parts of a statute are separable from the invalid parts thereof, it is the intention of the legislature that is the determining factor. The test to be applied is whether the legislature would have enacted the valid part if it had known that the rest of the statute was invalid. Vide Corpus Juris Secundum, Vol. 82, p. 156 Sutherland on Statutory Construction, Vol. 2, pp. 176-177. 1 1950 S.C.R. 594. 2 1951 S.C.R. 682. If the valid and invalid provisions are so inextricably mixed up that they cannot be separated from one another, then the invalidity of a portion must result in the invalidity of the Act in its entirety. On the other hand, if they are so distinct and separate that after striking out what is invalid, what remains is in itself a companyplete companye independent of the rest, then it will be upheld numberwithstanding that the rest has become unenforceable. Vide Cooleys Constitutional Limitations, Vol. 1 at pp. 360-361 Crawford on Statutory Construction, pp. 217-218. Even when the provisions which are valid are distinct and separate from those which are invalid, if they all form part of a single scheme which is intended to be operative as a whole, then also the invalidity of a part will result in the failure of the whole. Vide Crawford on Statutory Construction, pp. 218-219. Likewise, when the valid and invalid parts of a statute are independent and do number form part of a scheme but what is left after omitting the invalid portion is so thin and truncated as to be in substance different from what it was when it emerged out of the legislature, then also it will be rejected in its entirety. The separability of the valid and invalid provisions of a statute does number depend on whether the law is enacted in the same section or different sections Vide Cooleys Constitutional Limitations, Vol. 1, pp. 361-362 it is number the form, but the substance of the matter that is material, and that has to be ascertained on an examination of the Act as a whole and of the setting of the relevant provisions therein. If after the invalid portion is expunged from the statute what remains cannot be enforced without making alterations and modifications therein, then the whole of it must be struck down as void, as otherwise it will amount to judicial legislation. Vide Sutherland on Statutory Construction, Vol. 2, p. 194. In determining the legislative intent on the question of separability, it will be legitimate to take into account the history of the legislation, its object, the title and the preamble to it. Vide. Sutherland on Statutory Construction, Vol. 2, pp. 177-178. Applying these principles to the present Act, it will number be questioned that companypetitions in which success depends to a substantial extent on skill and companypetitions in which it does number so depend, form two distinct and separate categories. The difference between the two classes of companypetitions is as clear-cut as that between companymercial and wagering companytracts. On the facts, there might be difficulty in deciding whether a given companypetition falls within one category or number but when its true character is determined, it must fall either under the one or the other. The distinction between the two classes of companypetitions has long been recognised in the legislative practice of both the United Kingdom and this companyntry, and the companyrts have, time and again, pointed out the characteristic features which differentiate them. And if we are number to ask ourselves the question, would Parliament have enacted the law in question if it had known that it would fail as regards companypetitions involving skill, there can be numberdoubt, having regard to the history of the legislation, as to what our answer would be. Nor does the restriction of the impugned provisions to companypetitions of a gambling character affect either the texture or the companyour of the Act number do the provisions require to be touched and re-written before they companyld be applied to them. They will squarely apply to them on their own terms and in their true spirit, and form a companye companyplete in themselves with reference to the subject. The companyclusion is therefore inescapable that the impugned provisions, assuming that they apply by virtue -of the definition in s. 2 d to all kinds of companypetitions, are severable in their application to companypetitions in which success does number depend to any substantial extent on skill. In the result, both the companytentions must be found against the petitioners, and these petitions must be dismissed with companyts.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 161 of 1954. Appeal from the judgment and order dated, May 18, 1953, of the Calcutta High Court in Income-tax Reference No. 72 of 1951. A. Palkhivala, P. D. Himatsingka, J. B. Dadachanji, S. Andley Rameshwar Nath and P. L. Vohra, for the appellant. N. Joshi and R. H. Dhebar, for the respondent. 1957. May 23. The Judgment of the Court was delivered by KAPUR J.-This appeal brought on a certificate of the High Court raises a point of far-reaching companysequence as to the interpretation of ss. 8, 10 and 24 2 of the Indian Income- tax Act hereinafter termed the Act . The assessee who is the appellant before us claims that in the companyputation of its profits for the assessment year under review 1945-46 , it is entitled to set off the carried over loss of the previous year against the profits of the year of assessment under s. 24 2 of the Act. The assessee is a Bank carrying on banking business. For the assessment year its assessable income was companyputed by the Income Tax Officer at Rs. 14,95,826 by splitting up its income into 2 heads interest on securities and business income . Interest on securities in the year of assessment was Rs. 23,62,815 and under the head business income there was a loss of Rs. 8,86,972. After making the necessary adjust- ments and deducting the business loss from Interest on securities , the net income was determined at Rs. 14,95,826. In the previous year there was a loss of Rs. 3,21,929 which was companyputed by setting off the business loss against interest on securities . Before the Income-tax Officer the assessee made its claim on the basis that it was a part of the business of the Bank to deal in securities and that numberdistinction should be made between income from securities and income from business for the purpose of set- off under s. 24 . It also claimed that it carried on only one business, namely banking as defined by s. 277F of the Indian Companies Act in the companyrse of which the Bank has to receive money on deposits and invest such deposits in securities, loans and advances and therefore holdings of securities by it companyld number be treated as its separate business. The Income-tax Officer was of the opinion that, as there was a loss under the head business its claim companyld number be sustained and hence it companyld number be set off under s. 24 2 of the Act. On appeal to the Assistant Commissioner of Income-tax it was again companytended that the assessee was a dealer in securities and that the two heads of income, Interest on securities and profits and gains in banking business companyld number be treated separately and were part of the same business of the assessee and therefore it companyld claim a set-off under s. 24 2 of the Act. But this companytention was repelled. The matter was then taken to the Income-tax Appellate Tribunal where again the companytention was repeated that the business of the assessee companyld number be split up into two heads under interest on securities and banking business. The Tribunal, however, held Reading ss. 6, 8 and 10 it appears to us that the legislature wanted to keep the income from the two sources as separate. We are therefore of the opinion that the Income-tax Officer was right in splitting up the income of the appellant into two heads and in refusing the set-off of the business loss brought forward from last year against income from Govt. securities earned this year. It therefore did number allow the loss of the previous year to be set off against the companyputed profits of the assessment year. The assessee thereupon asked for a case to be stated to the High Court and inter alia raised two questions Whether interest on securities was a part of Banks income from business carried on by it. Whether the assessee was entitled to set off the carried over loss of the previous year against income during the assessment year. The assessee companytended that it was carrying on banking business in various towns in India, that in the usual companyrse of its business it invests moneys in Securities and receives interest thereon and therefore it claimed that the loss of Rs. 3,21,929, carried forward from the previous year companyld be set off under s. 24 2 of the Act. The Tribunal stated the case and sought the opinion of the High Court on the following three questions Whether on the facts and in the circumstances of this case, the assessee was entitled to set off the business loss of Rs. 3,21,929 brought forward from the preceding year against this years income from interest on securities held by the assessee. Whether on the facts and in the circumstances of this case the assessee was entitled under s. 8 to deduct any part of the administrative expenses out of the income from interest on securities. Whether in the circumstances of this case, the assessee was entitled under the first proviso to s. 8 of the Income- tax Act to deduct any interest on money borrowed and utilised for investment in tax-free securities. The High Court answered all the questions in the negative. The learned Chief Justice during the companyrse of his judgment said It appears to me, therefore, that because the several heads under s. 6 in the Indian Act are mutually exclusive and because under any Income-tax Law, an item companying under an exclusive head cannot in any circumstances be charged under another head and also because the interest on securities in the hands of a banker cannot be treated as business income on the principles explained by Mr. Justice Rowlatt, I must hold that the companytention of the asesssee must be rejected. We had the benefit of a full and able argument from companynsel on both sides. Counsel for the appellant has raised three points That ss. 8 and 10 of the Act should be so read that interest on securities, in cases where the true nature and character of the securities in the hands of an assessee is one of trading assets, would be excluded from the scope of s. 8 and would fall under the head business within s. 10 of the Act and alternatively even if ss. 8 and 10 are read as specific heads then s. 10, being more appropriate, should be applied to the facts of the present case If ss. 8 and 10 are equally applicable the assessee has the option to be taxed under that head which imposes a lighter burden on him and Lastly he companytended that even if the heads of income were to be taken as mutually exclusive so that the interest on securities falls under s. 8 and business under s. 10 of the Act, the assessee would be entitled to a set-off under s. 24 2 because interest on securities and profits and gains from business result from different operations of the same business, the two being different forms of the same business of the assessee. We may number turn to the scheme of the Act. Section 2 15 defines total income to mean total amount of income, profits and gainscomputed in the manner laid down in the Act. Chapter I of the Act deals with Charge of income-tax. It companysists of two sections-3 4. Section 3 provides that income-tax shall be charged for any year at any rate or rates in accordance with and subject -to the provisions of this Act. Section 4 provides that the total income of any previous year of any person includes all income, profits and gains from whatever sources derived. Chapter 3 deals with Taxable income. Section 6 enumerates the heads of income chargeable to incometax. It says as under S. 6 Save as otherwise provided by this Act, the following heads of income, profits and gains, shall be chargeable to income-tax in the manner hereinafter appearing namely Salaries. Interest on securities. Income from property. Profits and gains of business, profession or vocation. Income from other sources. Capital gains. The two relevant heads for the purpose of this appeal are ii iv , i.e., interest on securities and profits and gains of business which are dealt with under ss. 8 and 10 of the Act respectively. Section 8 provides that the tax shall be payable by an assessee under the head interest on securities in respect of interest receivable by him on any security of the Central Government and in the provisos to this section are given the allowable deductions. The amendment made in the proviso by the Act of 1955 is very relevant for the purpose of this appeal and we hall advert to it at a later stage. Section 10 provides The tax shall be payable by an assessee under the head profits and gains of business, profession or vocation in respect of the profits or gains of any business, profession or vocation carried on by him The assessee companytends that securities are a part of its trading assets and this position has throughout been accepted by the Department, and any income which accrues in respect of these assets in the form of interest has the same characteristics as profits or gains of business and therefore must be treated as income falling under the head business under s. 10 of the Act. In other words the income of the assessee from its banking business which includes dealing insecurities is,really income from the same source and whatever accrues in the form of interest whether from securities or from any other source of investment would fall under s. 10 and number s. 8 because all the interest accrues from the business carried on by the assessee and this business is only one business. The argument thus is that ss. 8 10 have to be so companystrued as to harmonise with each other and the only way they can be harmonised is that income accruing in the form of interest on securities should be taken to be accruing from the business of the assessee because securities form part of its trading assets and thus fall within s. 10 and number s. 8, which must be restricted to capital investments only. It is further companytended that if the object of the legislature was to give a separate and exclusive identity to the income from interest on securities, it would have made the language of s. 8 of the Act as specific as it has made in the case of income from dividends from shares, which income by the addition of sub-s. I-A to s. 12 has companye to have a specific place under the head other sources and is numberlonger within the head business under s. 10 of the Act and thus by statute its nature and character have undergone a change. Reference is in this companynection made to Commissioner of Income-tax v. Ahmuty company Ltd. 1 where it was held by the High Court of Bombay that dividend income received by a dealer in shares is chargeable under s. 10 and number under s. 12 of the Act. It is thus companytended that in order to preserve the unity and oneness of the business of the assessee and to maintain the unity of its business income the applicability of s. 8 should be circumscribed to interest on securities when they are -not trading assets of the assessee. According to the scheme of the Act discussed above income- tax has to be charged in respect of the total 1 1955 27 I.T.R. 63. income of the previous year of every assessee and total income is defined under s. 2 15 to companyprise all income, profits and gains from whatever source derived subject to certain exemptions. Chapter 3 which is entitled Taxable income companyprises ss. 6 to 17 both sections inclusive . Section 6 enumerates the various heads of income, profits and gains which are chargeable to income-tax. Each of these heads of income, profits and gains is dealt with under a separate section and these sections also give the details of allowances and exemptions in regard to each different head. The argument raised by companynsel for the Revenue is that according to the decision of the Privy Council in Probhat Chandra Barua v. The King Emperor 1 s. 6 is the charging section and that the words of ss. 7 to 12 show that the various heads of income are mutually exclusive and items which specifically fall under these various heads have to be charged under only that head and would fall under one of these several but appropriately specific sections. It is true that the Privy Council in Probhat Chandra Barua v. The King Emperor supra did point out that s. 6 was a charging section, but this was because ss. 3 and 4 were then differently worded as pointed out by Kania, J., in B.M. Kamdar, In re 2 at p. 43 and by Chagla, J., in the, same case at p. 57. The Federal Court in Chatturam and others Commissioner of Income-tax, Bihar 3 said The liability to pay the tax is founded on ss. 3 and 4 of the Income-tax Act which are the charging sections. The judgment of the Privy Council in Wallace Brothers Co. Ltd. v. Commissioner of Income-tax 4 also shows s. 3 to be the charging section. It is then argued that s. 6 of the Act being mandatory all items of income, from whatever source they arise, would fall only under one of the heads enumerated under s. 6 and therefore one of the ss. 7 to 12 would specifically apply and s. 8 which relates to interest on securities must be held to apply to income from that source. It is also companytended by companynsel for the 1 1930 L.R. 57 I.A. 228, 238. 2 1946 14 I.T.R. 10. 3 1947 15 I.T.R. 302, 308. 4 1948 16 I.T.R. 240. Revenue that even if there is any overlapping between ss. 8 and 10 interest on securities whether accruing from securities held as a capital asset or trading assets falls under s. 8 alone and s. 10 should be so read as to altogether exclude the income from interest on securities. Counsel for the Revenue has referred us to the form of the Return, prescribed under s. 22 1 of the Act at the relevant time of the assessment under review. The heads there shown are 1 Salary, 2 Interest on securities, 3 Property, Business, profession or vocation, 5 other sources, and income from each source is to be shown in a separate companyumn, in each one of which reference is made to a particular numbere relevant to that head of income. In the companyumn under the head interest on securities reference is made to numbere 9 which is in the following words Interest on securities means interest on promissory numberes or bonds issued by the Government of India or any other State Government or the interest on debentures or other securities issued by or on behalf of a local authority or companypany. The gross amount before deduction of income-tax should be entered. Entries under this head should be accompanied by persons paying the interest under section 18 9 of the Act. Deductions are allowable in respect of- Commission charged by a banker for companylecting the interest. Interest payable on money borrowed for the purpose of investment in the securities except certain interest payable to persons abroad from which tax has number been deducted see section 8 of the Act for details . Full particulars in a separate statement if necessary should be given of any deduction claimed. This is a statutory form and it gives what is meant by interest on securities , what documents are to accompany the Return in order to entitle an assessee to claim refund and what deductions are to be made. The mandatory character of s. 6 is indicated by the language employed in that section and the phraseology of all the sections following, i.e., 7 to 12, employing the words the tax shall be payable under the head in respect of the different and distinct heads of income, profits and gains, salaries Interest on securities , and property , business etc. is indicative of the intention of the legislature making the various heads of income, profits and gains mutually exclusive. So every item of income, whatever its source, would fall under one particular head and for the purpose of companyputing the income for charging of income-tax the particular section dealing with that head will have to be looked at. The various sources of income, profits and gains have been so classified that the items falling under those heads become chargeable under ss. 7 to 12 according as they are income of which the source is salaries interest on securities property business, profession or vocation , other sources or capital gains . Looked at thus the companytention of companynsel for the Revenue that under the scheme of the Act and on a true companystruction of these relevant sections interest on securities by whomsoever and for whatever purpose held has to be taxed under s. 8 and under numberother section is well founded and must be sustained. It being a specific head of chargeability of tax, income from interest on securities whether held as a trading asset or capital asset would have to be taxed under s. 8 and number under s. 10 of the Act. The amendment made in the proviso to s. 8 in the year 1955 allowing a deduction in respect of any remuneration paid to any person other than the banker for realising interest on behalf of the assessee, supports this interpretation. Thus this proviso number provides that reasonable amount can be deducted by an assessee for companymission paid to a Bank or remuneration paid to anybody else for realising interest on its behalf which clearly indicates the intention of the legislature that interest on securities specifically falls under s. 8 and under numberother section. This amendment shows that even a Bank, if it buys securities as a part of its trading assets, is entitled to make a deduction for remuneration paid by it to any person for realising interest which postulates that interest on securities would fall under s, 8 of the Act, This interpretation receives further support from the language of s. 18 which deals with payment after deduction at source. Section 18 3 requires a person responsible for paying interest on securities to deduct income tax on the amount of the interest payable at the maximum rate and the person so responsible is required, after deduction of the income-tax, to pay to the account of the Central Government within 7 days of the deduction, the sum so deducted and under s. 18 5 the maximum rate is to be charged for the year in which the the amount is paid and number at the rate of the assessment year. A companybined reading of ss. 3,4,6, 8,10,18 and refund section, s. 48, shows that income-tax is to be charged at the rate or rates prescribed in the Finance Act on the total income of the assessee as defined in s. 2 15 of the Act and companyputed in the manner given in as. 7 to 12 which are number charging sections but are provisions for the companyputation of total income . In the words of Viscount Dunedin in Salisbury House Estate v. Fry 1 Now, the cardinal companysideration in my judgment is that the income tax is only one tax, a tax on the income of the person whom it is sought to assess, and that the different schedules are modes in which the Statute directs this to be levied . As has been pointed out in that judgment there are numberseparate taxes under the various schedules but only one tax. But in order to arrive at the total income on which tax is to be charged you have to companysider the nature, the companystituent parts, of his assessees income to see which schedule you are to apply. If these words may be used with reference to the language of the Indian Act, we have to look at the source of income, profits and gains and then see under what head it appropriately and specifically falls and if it falls under one particular head then companyputation is to be made under the section which companyers that particular head of income. We cannot treat any one of the sections from ss. 7 to 10 to be general or specific for the purpose of any one particular source of income. The 1 1930 15 T.C.266,306. language shows that they are all specific and deal with the various heads in which the item of income, profits and gains in the case of an assessee falls. Sir George Rankin in Commissioner of Income Tax v. Chunilal Mehta l said The effect of s. 6 is to classify profits and gains, under different heads for the purpose of providing for each appropriate rules for companyputing the amount its language is shall be chargeable in the manner hereinafter appearing. One of the heads is business , which as a head of income stands alongside salaries, interest on securities, professional earnings and other sources. True, the classification of income is according to the character of the source But the list of heads in s. 6 is a list of sources number in the sense of attributing the income to one property rather than another, one business rather than another, but only in the sense of attributing it to property as distinct from employment, or business as distinct from investment What is to be learnt from an examination of the language of sub-s. 1 of s. 4-income, profits and gains, described or companyprised in s. 6 from whatever source derived-is that s. 6 is intended as describing different kinds of profits In that case the question for decision was whether a resident carrying on business in India and companytrolling transactions abroad in the companyrse of such business was liable to income tax on such transactions, it was held that the profits arising under such transactions do number arise or accrue in India merely because of companytrol by the assessee in India. The judgment of the Privy Council shows what s. 6 of the Act means-each head refers to income, profits and gains attributable to the source-salary, interest on securities, property, business, profession etc. This supports the companytention of each head being separate, exclusive and specific. Decided cases all support the companytention of companynsel for the Revenue that the various heads of income enumerated in s. 6 of the Act and more particularly 1 1938 6 I.T.R. 521, 529. dealt with in ss. 7 to 12 are exclusive heads and if an item of income falls under one of these heads then it has to be treated for the purpose of income tax under that head and numberother. In Salisbury House Estate Ltd. v. Fry 1 the assessee was a limited companypany which was formed for the express purpose of acquiring Salisbury House and utilising it. In this building there were 800 rooms which were let to tenants. The companypany also maintained a staff of servants to render various kinds of services to the occupants of the rooms. The companypany was assessed to income tax under Sch. A upon gross valuation of the premises and as the actual rent received was higher, the Revenue wanted to assess income again under Sch. D. The companypany companytended that so far as the proceeds of the property were companycerned they had already been taxed under Sch. A and companyld number again be brought in companyputo under Sch. D. Viscount Dunedin at p. 306 observed Now, if the income of the assessee companysists in part of real property you are, under the Statute, bound to apply Sch. A . Lord Atkin at p. 319 said the dominance of each Sch. A, B, C E over its own subject matter is companyfirmed by reference to the Sections and Rules which respectively regulate them in the Act of 1842. They afford a companyplete companye for each class of income, dealing with allowances and exemptions, with the mode of assessment, and with the officials whose duty it is to make the assessments. I find numberground for assessing the taxpayer under Sch. D for any property or gains which are the subject matter of the other specific Schedules. At p. 320, he pointed out that Sch. D is a residuary Schedule and all Schedules are mutually exclusive. Referring to investments in securities he said Income derived by a trading companypany from investments of its funds, whether temporary or permanent, in government securities must be taxed under 1 1930 15 T.C. 266. Sch. C, and cannot for the purposes of assessment under Sch. D be brought into account. This shows that even though Sch. D is residual all Schedules are mutually exclusive and if income falls under one Schedule, it must be assessed under that Schedule because the Schedules are a companyplete companye for each class of income, dealing with, allowances and exemptions and with the mode of assessment. A significant passage in the judgment of Lord Atkin at p. 321 is I find it difficult to say that companypanies which acquire and let houses for the purposes of their trade, such as breweries in respect of their tied tenants, and companylieries and other large employers of labour in respect of their employees, do number let the premises as part of their operation of trading. Personally I prefer to say that even if they do trade in letting houses their income so far as it is derived from that part of their trading must be taxed under Sch. A and number Sch. D. Thus even though the assessee was a companypany carrying on business or trade, income from the head property was taxed under Sch. A and number Sch. D. This case supports the companytention that different Schedules being distinctly applicable to each individual head of income would exclude the applicability of any other head. In Butler v. The Mortgage Company of Egypt Ltd. 1 , a British companypany companytrolled in Egypt was carrying on business of lending money on mortgage of land in Egypt or on the security of debentures by mortgage of land. In case of default the bank companyld take action in the Egyptian Courts either to sell the property or to take possession with a view to future sale. The General Commissioners held that the acceptance of ,securities for money lent was only an incident of the companypanys business and that income was number assessable under Case 4 of Sch. D. The companypany claimed that the assessment should be under Case 5 of Sch. D and number Case 4. It was held that the Crown had the right to tax under Case 4 but even if the assessee satisfies 1 1928 13 T.C. 803, 809, 810. that Case 5 is also applicable it was still for the Crown to decide and tax under Case 4 provided both cases applied equally. Rowlatt J. said A banker companyld never ask to be repaid the tax which had been deducted from the Government securities which he held, because he held them as a banker, the point being that when you have once got a security we will say the interest on which is taxed by the Act, you cannot get out of it because you say that you look a little further and see this is only embedded in a business. It means in terms of the Indian Statute that in the case of interest on securities if chargeable under a specific section, the assessee even though he is a banker cannot claim that they be treated as business income. in Thompson v. The Trust and Loan Company of Canada 1 , the respondent companypany carried on business as a loan and finance companypany. During the material years the companypany bought treasury bonds cum-coupons and on the same day sold bonds of the same numberinal value retaining the companypons and received on encashment a half years interest under deduction of income tax. The Crown companytended that in companyputing the Companys profits for assessment to income tax under Case I of Sch. D there, should be included, as receipts, the amounts realised by the sale of bonds ex-coupons and the net proceeds of the companypons and, as disbursements, the amounts paid by the companypany for the bonds cum-coupons. But it was held that the interest received by the companypany was income of the companypany taxed by deduction under Sch. C and that numberpart of the proceeds of the companypons should be included in the companyputation of the companypanys liability under Sch. D. Rowlatt J. at p. 400 said The Crown cannot treat a transaction which has its own character for income tax purposes as if it were something of a different character and Lord Hanworth M.R. at p. 406 put the matter thus 1 1932 16 T.C. 394. Now in the present case it is plain that this subject matter of tax, government bonds and companypons payable out of the government funds, have got to be taxed under Sch. C they cannot be taxed anywhere else. In Volume I of Simons Income Tax 1948 Ed. p. 54 the law is thus stated These Schedules are prima facie mutually exclusive and companysequently if a particular kind of income is charged under one Schedule the Crown cannot elect to charge it under another. This is in accord with the decisions discussed above. The Commercial Properties Ltd. v. Commissioner of Income- tax, Bengal 1 was a case of a registered companypany whose sole object was to acquire lands,, build houses and let them to tenants, the sole business of the companypany being the management and companylection of rents from the properties. The assessment was made under s. 9 of the Act but the companypany claimed that they were carrying on a business assessable under s. 10 and number under s. 9. The Court held that the companypany was rightly assessed under s. 9, its income being derived from its ownership of buildings. Rankin C. J. said at p. 26 In my judgment the words of s. 6 and s. 9 and s. 10 must be read so as to give some effect to the companytrast that is there made between income, profits and gains from property and from business and I entirely refuse my assent to the proposition that because it happens that the owner of a property is a companypany which has been. incorporated for the purpose of owning such property, therefore the income derived from property must be regarded as income derived from business . In my judgment, income derived from property is a more specific category applicable to the present case. The decision in this case shows that the ownership of the house property was number companysidered as business and that income derived from such source would more specifically and appropriately fall within the head property. 1 1928 3 I.T.C. 23. The applicability of s. 8 directly arose and was discussed in H. C. Kothari v, Commissioner of Income-tax, Madras 1 . The assessees in that case had several sources of income, one of which was interest on securities. The business of the assessees showed a loss but the assessees claimed earned income relief in respect of interest on securities on the ground that securities, which they had purchased and sold as part of their business, formed their stock-in-trade and the interest therefrom should be treated as business profits. But s. 8 of the Act was held applicable to the facts of that case. Satyanarayana Rao, J. said of the Act which deals with interest on securities is a separate and distinct head, and if an income is chargeable under that head, it is number open either to the assessee or to the department to change the head and claim to tax it under a different head It was also pointed out in this judgment following Commissioner of Incometax v. Bosotto Bros. 2 that if income falls under more than one head the assessee has the option to choose the head which makes the burden on his shoulders lighter. The following two cases were relied upon by the assessee- Mangalagiri Sri Umamaheshwara Gin and Rice Factory Ltd. Guntur Merchants Gin and Rice Factory Ltd. 3 where a limited companypany incorporated for the purpose of milling rice leased out the buildings, plant, machinery etc., to another companypany for a fixed annual rent. The lessees were to do the necessary repairs to keep the mill in good working companydition and the lessors were to bear the loss of depreciation. The assessee companypany claimed the allowances for depreciation under s. 10 2 vi of the Act. It was held that the companypany was carrying on the business of letting a rice mill and as such was entitled to a deduction for depreciation. The judgment of Krishnan, J., shows that it was clear from the facts of the case that the companypany was carrying on business 1 1951 20 I.T.R. 579, 587. 3 1926 2 I.T.C. 251. 2 1940 8 I.T.R. 41. of letting the mill for the purpose of being worked by lessees and it was under these circumstances that s. 10 was- held applicable. The other case is Sadhucharan Roy Chowdhry, In re 1 the facts of which were similar to the facts of Mangalagiri Sri Umamaheshwara Gin and Rice Factory Ltd. v. Guntur Merchants Gin and Rice Factory Ltd. supra . It was held that letting of a Jute Press at rent was as much a business as the letting of a ship to freight or letting of motor-car or any other kind of machines or machinery for hire, and therefore allowances for depreciation were allowed like in Mangalagiris case supra . Neither of these cases throws any light on the question number before us. The appellants companytention that looking at the real nature and character of the source of income arising from interest on securities in the case of the present assessee, the Bank, s. 10 of the Act would apply and number s. 8 can receive numbersupport from the decision in Davies v. Braithwaite 2 . That was a case where an actress earned her living by accepting and fulfilling professional engagements, her activities being acting in stage-plays in England and America, performing for the films and on the wireless and performing for gramophone companypanies. These were held to fall under Sch. D and number E as whatever companytracts she made were numberhing but incidents in the companyduct of her professional career. The use of the following words by Sir George Rankin in Commissioner of Income-tax v. Chunilal Metha 3 But the list of heads in s. 6 is a list of sources number in the sense of attributing the income to one business rather than another but only in the sense of attributing it to business as distinct from investment. is numbersurer foundation for saying that interest on securities is severable into income from securities held as a capital investment and income from those held as trading assets. The language of ss. 6, 8 and 10 is destructive of any such companytention. 1 1935 3 I.T.R. 114. 2 1931 2 K.B. 628. 3 1938 6I.T.R. 521, 529. Thus on a true companystruction of the various sections of the Act the income of an assessee is one and the various ss. 7 to 12 are modes in which the Statute directs that income-tax is to be levied and these sections are mutually exclusive. The head of income of which the source is interest on securities has its characteristics for income-tax purposes and falls under the specific head companyered by s. 8 of the Act, and where an item falls specifically under one head it has to be charged under that head and numberother. This interpretation follows from the words used in ss. 6, 8 and 10 which must be read so as to give effect to the companytrast between income, profits and gains chargeable under the head interest on securities and income, profits and gains chargeable under the head business . Thus on this companystruction the various heads of income, profits and gains must be held to be mutually exclusive, each head being specific to companyer the item arising from a particular source. It cannot, therefore, be said that qua the assessee in the present case and for the purpose of securities held by it, s. 8 is more specific and s. 10 general or vice-versa, and therefore numberquestion of the applicability of the principle generalia specialibus number derogant arises. This finds support from the decided cases which have been discussed above. Thus both on precedent and on a proper companystruction, the source of income interest on securities would fall under s. 8 and number under s. 10 as it is specifically made chargeable under the distinct head interest on securities falling under s. 8 of the Act and cannot be brought under a different head even though the securities are held as a trading asset in the companyrse of its business by a banker. In this view of the matter numberquestion of exercise of option by the assessee or the Revenue arises. Consequently Lord Shaws observation in The Liverpool and Land Globe Insurance v. Bennett 1 It appears to me that this selection is number only justified in law but is founded upon the soundest and most elementary principles of business, 1 1913 6 T.C. 327, 376. will be inapplicable to the facts of the present case, and so also the rule as to choosing the head which imposes on the assessees shoulders burden which is highter as given in Commissioner of Income-tax v. Bosotto Bros., supra and reiterated in H. C. Kothari v. Commissioner of Income-tax, Madras supra . To the third point raised by companynsel for the assessee that even if interest on securities falls under s. 8 of the Act and number under s. 10 the assessee is entitled to Yet a set- off under s. 24 2 of the Act, companynsel for the Revenue has taken the objection that this plea is number available to the appellant because it was number placed before the Income Tax Appellate Tribunal for being referred to the High Court number was it raised before the High Court. How the question was specifically raised before the Income Tax Officer and the Appellate Assist. ant Commissioner and also before the Income Tax Appellate Tribunal has already been mentioned. In its application to the Tribunal for stating the case to the High Court the assessee specifically raised in two suggested questions its right to set off the business loss of Rs. 3,21,929 brought forward from the previous year against the income of the assessee in the assessment year. It does number appear from the judgment of the High Court that the question was argued in the manner it has been debated in this companyrt. The appellant seems to have rested his case on the applicability of s. 10 to the profits under the head interest on securities because of the securities being trading assets but this companytention was repelled and the same question has been raised before us but the assessee number supports his case on an alternative argument that even if the securities fall under s. 8 still the profits from that source are from an item of the assessees business and therefore the loss of the previous year from the banking business of the assessee can be set off against the profits of the assessment year whatever be the source of that profit. The case is similar to the one in Commissioner of Income-tax v. Messrs. Ogale Glass Works Ltd. 1 . The question framed by the Tribunal is a general one and what is to be determined is whether 1 1955 1 S.C.R. 185, 196, 198. the loss of the previous year can be set off against the income of the assessment year within the provisions of s. 24 2 of the Act. The question is wide enough to companyer the point raised before us. In the circumstances of this case the third point, raised by companynsel for the assessee, is open to be canvassed before us. Counsel for the Revenue companytends that the words used in s. 24 2 were the same business and therefore this set-off would be allowable only against any profits or gains of the game business and numberother business. He further companytends that the scheme of s. 24 1 and 2 shows that profits and gains must be arising under s. 10 and number under any other section because the expression used is profits or gains which goes with business under s. 10 and cannot have reference to income, profits and gains arising from interest on securities which are under s. 8 of the Act. Counsel for the assessee on the other hand submits that the use of the word same signifies the identity of the business in which the loss has occurred and has numberreference to the head under which the profits are chargeable. In other words interest does number cease to be profits and gains of the same business merely because for the purpose of chargeability it falls under a different head, i.e., under s. 8 and number under s. 10. Section 24 of the Act deals with the set-off of loss in companyputing the aggregate income. He also companytends that the business which the assessee was carrying on was the business of dealing in money and credit and that banking and dealing in securities companystitute one and the same business. He refers to s. 277 F of the Indian Companies Act and relies on the Privy Council decision in Punjab Co-operative Bank Ltd. v. The, Commissioner of Income-tax, Punjab 1 in which it was pointed out that in the ordinary case of a bank the business companysists in its essence of dealing with money and credit. The banker has always to keep enough cash or easily realisable securities to meet any probable demand by depositors, and if some of the securities are realised to meet 1 1940 8 I.T.R. 635. withdrawals by depositors, this is clearly a numbermal step in carrying on the banking business. It is an act done in what is truly carrying on of the banking business. In view of the order we propose to make, we do number find it necessary to express any opinion on the respective companytentions raised by companynsel for the parties. In Punjab Co-operative Banks case supra a finding had been given that the purchase and sale of securities was as much the assessees business as receiving deposits from clients and withdrawals by them. In the case before us numbersuch finding has been given and in the absence of such finding numberopinion can be given as to whether the holding of securities out of which interest was derived formed part of the same business within s. 24 2 or number.

Case appeal was accepted by the Supreme Court

Bhagwati, J. This appeal with special leave is directed against a judgment and order of the High Court of Judicature at Calcutta delivered on a reference by the Income-tax Appellate Tribunal Calcutta Bench under section 66 1 of the Indian Income-tax Act XI of 1922 hereinafter referred to as the Act whereby the High Court answered the referred question in the negative. The facts leading up to this appeal may be shortly stated as under Prior to November 29, 1928, Steel Bros. Co. Ltd. hereinafter referred to as Steels and Ellermans Arracan Rice and Trading Co. Ltd. hereinafter referred to as Ellermans carried on trade in Burma rice and or its by-products in Burma in London and elsewhere inter alia through Burma and London Bullenger Rice Pool and the New General Rice Co. Ltd. Apart from the selling of rice, both these companypanies had rice milling machines and produced rice from paddy. There was another companypany known as the Burma Co. Ltd. hereinafter referred to as Burma . This companypany also had a few rice mills. It never purchased paddy or sold rice. All the shares of this companypany were held by Steels, who were also its managing agents. On or about November 29, 1928, an agreement was entered into between the Steels, Burma and Ellermans to provide for the amalgamated working of the Burma rice business in Burma and London of all the three companypanies under the management of Steels. The companybined business of Steels, Burma and Ellermans was referred to therein as the Combination. All stocks of Burma rice and by-products in hand at 30th November, 1928, were excluded from this agreement and remained the property of the individual owners to be disposed of by them as they thought fit and the entire business in Burma hitherto carried on by Ellermans was to be taken over and managed by Steels as from 1st December, 1928, and companyducted from Steelsoffices in London, Rangoon and other Burma branches in Steels name solely and in companyjunction with the whole of the rice business of all descriptions of Steels and Burma and Steels were to companyduct the said business in such manner as they in their absolute discretion should think fit. The profit or loss of the business of the Combination carried on at the under mentioned places was to be shared by and divided between Steels and Ellermans in the following ratios Rangoon Bassein Akyab Moulmein Steels Burma 68 68 68 72 Ellermans 32 32 32 28 The rice mills belonging to Burma, viz., Burma Upper Kanungtoe Mill in Rangoon, Burma Mill in Bassein and Burmas Martaban Mill in Moulmein, were to be worked by the Steels for the purpose of the Combination clause 4a . The agreement was to take effect as from 1st December, 1928, and companyld be terminated on 30th November, 1930, or on any subsequent 30th November, by and party giving numberice to that effect to others number later than the preceding 1st August clause 12 . The agreement was signed and the companymon seals of Steels and Ellermans were affixed thereto and it was also signed by one James Kilgour Michie for and on behalf of Burma. In companynection with the assessments for the assessment years 1943-44 and 1944-45 the Combination which is hereinafter referred to as the assessee made applications to the Income-tax Officer under section 26A of the Act for registration of their partnership said to be companystituted of Steels and Ellermans. These applications were signed by the Steels and Ellermans only and were supported by a companyy of the agreement dated November 29, 1928, which was relied upon as the instrument of partnership of which registration was sought. By two separate orders dated March 19, 1948, and March 31, 1949, the Income-tax Officer, District V, Calcutta, refused registration of the partnership on the ground i that the partnership was number companystituted of Steels and Ellermans only but was companystituted of those two parties and a third party, viz, Burma, and that the partnership deed did number specify the shares of the said three partners and ii that the loss arising during the previous year had number been properly allocated proportionately to the said three partners the whole of the loss falling to the shares of Steels and Burma having been borne by Steels only. The assessee carried an appeal before the Second Additional Appellate Assistant Commissioner of Income-tax, A Range, Calcutta, who upheld the orders of the Income-tax Officer on the grounds that the application for registration was signed by two partners, Steels and Ellermans, whereas the partnership deed showed that it was a partnership of three partners and that the individual shares of Steels and Burma were number shown separately. The assessee preferred an appeal to the Income-tax Appellate Tribunal Calcutta Bench and by its order dated the 20th February, 1951, the Tribunal held that although the agreement entered number into on November 29, 1928, showed that the three companypanies would carry on the whole of their Burma rice business on amalgamation, on an examination of the agreement it would appear that the companypanies which formed the partnership were really Steels and Ellermans and Burma which was a hundred per cent. subsidiary of Steels had hardly anything to do with the Combination. In its order the Tribunal observed In order to determine whether there was a partnership we have to look into the surrounding circumstances also under section 6 of the Partnership Act and reading the document as a whole and companysidering the fact that it was drawn up in 1928, and also taking into account the profit and loss account of the Burma Co., for the years ending November, 1941, November, 1942, and November, 1943, we think that the partnership was really between Steels and Ellermans. Burma is bracketed with Steels in paragraph 3 a in a broad sense as Steels were holding all the shares of Burma. We are therefore of opinion that the deed is a proper deed and should be registered. Upon the application of the Commissioner of Income-tax, West Bengal the respondent herein , the Tribunal stated a case and referred the following question of law to the High Court for its decision under section 66 1 of the Act Whether on a proper companystruction of the deed of agreement dated 29th November, 1928, and having regard to the relevant facts and circumstances of the case, the Tribunal was right in holing that the partnership was really between Steels and Ellermans and that, therefore, registration should have been allowed under section 26A of the Indian Income-tax Act. The reference was heard by the High Court and the High Court answered the referred question in the negative. The High Court was of the opinion that on a true companystruction and effect of the agreement and particularly having regard to the recital in the agreement and the provisions companytained in clauses 1, 3 a , 12 and 14, thereof, the partnership was a partnership of the three companypanies and as the applications were number made by the said three companypanies and the deed of partnership did number specify their respective shares, the registration of the partnership was rightly refused. The assessee applied for a certificate of fitness under section 66A 2 of the Act which was, however, refused by the High Court with the result that the assessee applied for and obtained from this companyrt special leave to appeal under article 136 of the Constitution. The sole question that arises for our determination in this appeal is whether on a proper companystruction of the agreement dated 29th November, 1928, and having regard to the facts and circumstances of the case the applications by the assessee for the registration of the partnership showing Steels and Ellermans as the only partners thereof with their specific shares set our as against each of them and signed only by them were rightly refused by the Income-tax Officer. Section 26A of the Act provides Application may be made to the Income-tax Officer on behalf of any firm, companystituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income-tax or super-tax. The application shall be made by such person or persons, and at such times and shall companytain such particulars and shall be in such form, and be verfied in such manner, as may be prescribed and it shall be dealt with by the Income-tax Officer in such manner as may be prescribed. Rule 2 of the Indian Income-tax Rules, 1922, prescribes Any firm companystituted under in instrument of partnership specifying the individual shares of the partners may, under the provisions of section 26A of the Indian Income-tax Act, 1922, Such application shall be signed by all the partners number being minors personally, or in the case of a dissolved firm by all persons number being minors who were partners in the firm immediately before dissolution and by the legal representative of any such partner who is deceased In order that an application for registration be entertained by the Income-tax Officer and the partnership registered for the purpose of the Act, it is necessary that the application should be signed by all the partners of the firm and should specify the individual shares of the partners. Unless that is done it would number be companypetent to the Income-tax Officer to entertain the application and it would number be obligatory upon him to register the partnership for the purpose of the Act. The question, therefore, that falls to be determined is whether under the agreement dated 29th November, 1928, Steels and Ellermans who were the signatories to the applications for registration were the only two partners in the Combination or there was also a third partner along with them, viz., Burma, which even though it was a party to the agreement had numberindividual share specified in the profit of loss of the Combination. It was rightly companyceded by the learned companynsel for the appellant that if on a true companystruction of the agreement dated 29th November, 1928, and having regard to the relevant facts and circumstances of the case the companyrt came to the companyclusion that Burma was in fact a partner in the Combination along with Steels and Ellermans the applications for registration of the partnership which were signed by Steels and Ellermans only and which specified their individual shares in the ratios set out in clause 3 a of the agreement were number in accordance with the provisions of section 26A of the Act and rule 2 of the Indian Income-tax Rules, 1922, inasmuch as neither had Burma signed the same number was any individual share of Burma specified in clause 3 a of the agreement. The determination of this appeal, therefore, turns on the true companystruction of the agreement dated 29th November, 1928, regard being had to the relevant facts and circumstances of the case. The relevant facts and circumstances of the case find their place in the referred question as framed and were also sought to be imported under section 6 of the Indian Partnership Act, 1932, which provides Mode of determining existence of partnership. - In determining whether a group of persons is or is number a firm, or whether a person is or is number a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together. The facts and circumstances which were thus sought to be relied upon by the appellant were i that all the shares of Burma were owned by the Steels, ii that according to the findings of the Tribunal Burma never purchased paddy or sold rice, iii that numbershare of the profits of the Combination had ever been paid to or received by Burma and iv that in the carrying out of the agreement the only earnings of Burma had been by way of milling hire paid by Steels to Burma. We shall at the appropriate place companysider the bearing of these facts and circumstances on the question arising for our determination. Turning number to the agreement dated 29th November, 1928, we find in the first instance that it is an agreement entered between three parties, viz., Steels, Burma and Ellermans, to provide for the amalgamated working of the Burma rice business in Burma and London of Steels, Burma and Ellermans under the management of Steels. The entire business in Burma rice hitherto carried on by Ellermans is to be taken over and managed by Steels as from 1st December, 1928, and companyducted from Steels offices in London, Rangoon and other Burma branches in Steels name solely and in companyjunction with the whole of the rice business of all descriptions of Steels and Burma. Steels are to companyduct the said business in such manner as they in their absolute discretion shall think fit. The companybined business of Steels, Burma and Ellermans is therein referred to as the Combination clause 1 . At the end of each accounting year the profit or loss of the business of the Combination carried on at the various places therein mentioned is to be shared by and divided between Steels and Ellermans in the following ratios Rangoon Bassein Akyab Moulmein Steels Burma Having 68 68 68 72 and Ellermans 32 32 32 28 respectively clause 3a . The accounts after being signed in the manner therein mentioned are to be accepted as final and companyclusive and binding on Steels and Ellermans and from the accounts of each year a profit and loss account is to be prepared in London and such account is to be final and companyclusive and binding on all the parties, viz., Steels, Burma and Ellermans clause 3d . A restriction is imposed on Steels, Burma and Ellermans against hiring out to any other parties of the properties owned by them or the user thereof by the respective owners for any purpose without the previous companysent of Steels clause 4a . Steels and Burmas existing Rangoon fleet or rice cargo boats, motor barges and towing launches also such of Ellermans towing launches as may be companysidered necessary for the purpose of the Combination are to be employed for such purposes but remain the property of the respective owners clause 6 . All bonuses paid to any member of the staff for passing language examination, the companyt of furlough passages to and from Europe for all members of Steels, Burma and Ellermans staffs employed for the purpose of the Combination whose leave is due and taken during the period of the agreement and the companyt of medical attendance to which Steels, Burma and Ellermans staff employed for the purpose of the Combination are entitled under their respective agreements are chargeable to the Combination clause 7 . All Bullenger Settlements are to be for account of the Combination and are to be embodied in the Combination P and L a c for distribution in the ratios laid down in clause 3 thereof clause 10 . The agreement is to companye into effect on the 1st December, 1928, and can be terminated on 30th November, 1930, or any subsequent 30th November, by any party giving numberice to that effect to the others number later than the preceding 1st August clause 12 . In the event of any dispute arising out of or in relation to the agreement other than a dispute for the settlement of which specific provision has been therein made, the same is to be decided by arbitration in accordance with the provisions of the Arbitration Act, 1889, clause 13 . It is further declared that in entering into the agreement and making the arrangements thereby companytemplated, the parties intend to work their respective businesses jointly and give mutual assistance to each other and secure greater economy in working clause 14 . The agreement is signed number only be Steels and Ellermans but also by one James Kilgour Michie for and on behalf of Burma. The clauses of the agreement hereinabove set out would, if there was numberhing more, spell out a partnership between the Steels, Burma and Ellermans. The relationship which has been brought into existence between the three parties is a relationship between partners who have agreed to share the profits of a business carried on by all or any of them acting for all within the meaning of the definition of partnership given in section 4 of the Indian Partnership Act, 1932. Even if the definition of partnership which was companytained at the relevant date in section 239 of the Indian Contract Act IX of 1872 be taken into account, the relationship between the parties is one which subsists between partners who have agreed to companybine their property, labour and skill in the business of the Combination and to share the profits thereof between them. It is however pointed out on behalf of the appellant that there are several clauses in the agreement which companyfer rights on Ellermans which rights are number companyferred on Burma and they are The right to be fully advised of the progress of the business from time to time and to have due companysideration given to any suggestions or observations which they may from time to time make in reference thereto clause 1 . The right to have the accounts made up in Burma for the year ending 30th November, 1930, and for any subsequent year audited by a firm of chartered accountants in Burma designated for the purpose by Steels if a request in writing is received by Steels in London from them before the first November, immediately preceding the companymencement of the period companyered by such accounts the right to inspect all accounts and also to receive a companyy of the accounts clause 3d . The right of their superintending engineers along with those of the Steels, before any mills or other articles are taken over by Steels from any party to the agreement for the purposes of the Combination to satisfy themselves that all are in efficient working order and also to decide whether any item of expenditure shall be classed as repairs or renewals clause 4c . A similar right given to their superintending engineers to decide what mills stores are likely to be required for purposes of the Combination and to fix the current market value thereof clause 4e . The right to have assurance that the mills owned by them shall get a fair share of all paddy landed and that the mills taken over for the purposes of the Combination will be worked as far as possible to full capacity clause 4f . The right to refer matters under sub-clauses c and e of clause 4 to arbitration clause 5 . The right of their superintending engineers along with those of the Steels to satisfy themselves that the cargo boats, motor barges and towing launches of all parties employed for the purposes of the Combination are in efficient working order clause 6 . The right to the utilization of the finance provided by them clause 11a . The right to the use of their bankers in companynection with bills and drafts clause 11b . The right to have their London office drawn upon for a fair share of clean drafts clause 11c A specific provision made in clause 14 for the protection of their interests. These are specific provisions made in favour of Ellermans under the terms of the agreement numbere of which obtains so far as Burma is companycerned. It is therefore urged that Burma companyld number be a partner along with Steels and Ellermans in the Combination. It has, however, to be numbered that Burma was a subsidiary companypany of the Steels and all the hundred per cent. shares of Burma were owned by the Steels. Steels were moreover the managing agent of Burma. The relationship between Steels and Burma was thus a relationship between a parent companypany and a subsidiary companypany and even though in law they were separate entities they were in reality one and the same. There was numberconflict of interests at any time between Steels and Burma, and Steels who were the managing members of the Combination were expected number only to look after their own interests but also the interests of Burma. The Ellermans on the other hand were strangers who became members of the partnership along with Steels and Burma. They had to be given certain rights in order to protect their interests as against Steels and Burma. It was number necessary under the circumstances to provide any special rights of this nature in favour of Burma and the fact that numbersuch rights were given to Burma as were given to Ellermans does number lead to the companyclusion that Burma was number a partner along with Steels and Ellermans in this Combination. It would have been superfluous to provide these rights to Burma for the simple reason that they would have been exercised only by Steels who were its managing agents. If as a matter of fact the Steels were the managing members of the Combination they would be doing everything necessary for the protection number only of their own interest but also the interests of Burma and if that was so there was numberneed at all to provide any separate rights for Burma of the nature which were provided for Ellermans. If this position is borne in mind the provision in clause 3a of the agreement also is easy to understand. So far as the partnership was companycerned a joint share between Steels and Burma was reserved by bracketing Steels and Burma together and providing for the distribution of profit or loss of the business of the Combination in the ratios therein specified as between Steels and Burma on the one hand and Ellermans on the other. These ratios were also suggestive as providing roughly two shares between the Steels and Burma bracketed together and one share for the Ellermans who were the third partner in the Combination. As between Steels and Burma however it was number thought necessary to distribute the profits any further for the simple reason that whatever profits went to Burma would ultimately find their way to Steels - the Steels having owned all the 100 per cent. shares of Burma. Even though this distribution of the shares in the ratios mentioned above was thus provided in clause 3a of the agreement reserving for Steels and Burma jointly and for Ellermans individually the particular shares in the profit or loss as therein specified , clause 3 went on to provide that the profit or loss of the Combination will be shared by and divided between Steels and Ellermans. The Steels were to receive whatever came to the joint shares of the Steels and Burma and what they did thereafter was purely a matter between them and Burma. Burma agreed under clause 3a agreement to have a joint share in the profit or loss of the Combination along with Steels and also agreed that whatever came to their joint share should be received by the Steels and that is why clause 3a provided for the actual division of the profit or loss between the Steels and Ellermans. The fact that numberprovision was made for the receipt of any share by Burma in the profit or loss falling to the joint share of Steels and Burma does number necessarily mean that Burma had numbershare in the Combination. There is numberambiguity whatever, number is there any mystery or mistake in the provision companytained in clause 3a in regard to the distribution of the profit or loss of the Combination. As a matter of fact, clause 3a definitely points to the companyclusion that Burma was a partner along with Steels and Ellermans in the Combination. On a true companystruction of the agreement dated 29th November, 1928, we have, therefore, companye to the companyclusion that Burma was a partner along with Steels and Ellermans in the Combination and had a joint share with the Steels in the profit or loss of the Combination. It was entitled to terminate the partnership by giving numberice to the other partners as specified in clause 12 of the agreement. It had also a right to refer all the disputes arising between the partners to be decided by arbitration in accordance with the provisions of the Arbitration Act, 1889. There was a sharing of the profit or loss of the business of the Combination and there was also an agency in so far as Steels were to manage and carry on the business on behalf of all the partners of the Combination. Thus all the ingredients of partnership were satisfied and it is futile to urge that the agreement was a hybrid document which was a tripartite agreement so far as the business of the Combination was companycerned and was a partnership agreement only between two partners, viz., Steels and Ellermans. There is number the slightest doubt whatever that Burma was a partner with Steels and Ellermans in the business of the companybination and the partnership which was entered into under the terms of agreement was a partnership between three partners, viz., Steels, Burma and Ellermans. Having regard to the above, it would be unnecessary for us to companysider whether there were facts and circumstances in the case which would go to detract from this position and show that even though ostensibly there was a partnership of three parties, viz., Steels, Burma and Ellermans, in reality the Combination companysisted of only two partners, viz., Steels and Ellermans, and Burma was merely a companyfirming party thereto. We shall however companysider the facts and circumstances on which particular reliance has been placed on behalf of the appellant in view of the fact that the referred question has been framed in a manner which requires the companysideration of such facts and circumstances of the case. Adverting to these facts and circumstances, we find that there is numberhing in them which runs companynter to the companyclusion which we have reached above. The fact that all the shares of Burma were owned by the Steels really explains why Burma was number given any specific rights like Ellermans in the agreement dated 29th November, 1928, for the protection of its interests, inasmuch as the interests of Burma were absolutely safe in the hands of the Steels and numberprovision was required to be made for the protection of Burmas interests as such. The fact that Burma never purchased paddy or sold rice is also devoid of significance because Burma had companytributed its properties to the Combination and there companyld number be any independent purchase of paddy or sale of rice by Burma after the Steels assumed and carried on the management of the business of the Combination. The circumstance that numbershare of the profits of the Combination had ever been paid to or received by Burma has been already explained above. The Steels and Burma had a joint share amongst themselves which was roughly two- thirds of the total profit or loss of the Combination. All the hundred per cent. shares of the Burma were owned by Steels and if as a result of internal arrangement between themselves the Steels appropriated to themselves all the profits which came to the Steels and Burma jointly in the Combination, that was certainly number a circumstance which would go to show that Burma was in fact numberpartner in the Combination. The further circumstance that in the carrying on of the agreement, the only earnings of Burma had been by way of milling hire paid by Steels to Burma, again is of numberconsequence. So far as the books of account of the Combination were companycerned it does number appear that there was any payment by the Combination to Burma at all of the milling charges and if by some arrangement between Steels and Burma, Steels actually did pay to Burma a sum of money out of the profits earned in the joint share of the Steels and Burma, that again was a matter of internal arrangement between Steels and Burma and such payment by the Steels companyld number detract from the position of Burma as a partner in the Combination if the terms and companyditions of the agreement dated 29th November, 1928, did number spell out anything to that effect. These facts and circumstances are of numbersignificance whatever and do number help the appellant in the companytention which has been urged on its behalf that the real position of Burma was that of a party to the companybine but number that of a partner in the Combination. There is numberjustification whatever, in our opinion, for companytending that the agreement dated 29th November, 1928, was a companyposite agreement which companyld be divided into two parts, viz., 1 a tripartite agreement between the members of the Combination and 2 an agreement of partnership between Steels and Ellermans only, Burma being merely a companyfirming party to it in so far as a part of its assets were thrown into the Combination.

Case appeal was rejected by the Supreme Court

BHAGWATI, J. - These are six companysolidated appeals arising out of a companymon judgment and six separate orders of the High Court of Judicature at Patna with certificates under section 66A 2 of the Indian Income-tax Act and they raise companymon questions of la Whether in the facts and circumstances of the case, the receipts of Bankura forest lease are capital receipts or, in the alternative, companystitute agricultural incom ? Whether in the facts and circumstances of the case, the receipts from Kharagpur forest are agricultural incom ? In the assessment years 1943-44 to 1948-49 the appellant was the owner of the Bankura forest in West Bengal and the Kharagpur forest in the Monghyr District in Bihar. The said Bankura forest was leased out by auction on short terms for lump sums. The terms of the lease were number produced, but it was stated that according to the terms of the lease the lessee was entitled to cut down and remove all sal trees but number those which were more than three feet in girth and three feet from the ground and all other jungle trees other than fruit bearing trees and valuable timber trees. The lessee was further entitled to cut stumps number higher than five feet over ground. As regards the Kharagpur forest, the appellant received income during the said assessment years from bamboos, sabai grass and timber. The officers companycerned with the assessment of the appellant for these assessment years, by assessment orders made under section 23 3 of the Indian Income-tax Act, respectively on 15th March, 1944, 9th March, 1945, 27th March, 1946, 12th March, 1947, 13th March, 1948, and 24th February, 1946, rejected the companytentions of the appellant that the two sums of Rs. 7,436 and Rs. 11,468 received during the year of account 1349 Fasli, of Rs. 23,581 and Rs. 17,027 received during the year of account 1350 Fasli, of Rs. 20,582 and Rs. 59,514 received during the year of account 1351 Fasli and of Rs. 14,750 and Rs. 98,969 received during the year of account 1352 Fasli, of Rs. 13,836 and Rs. 1,17,173, received during the year of account 1353 Fasli and of Rs. 22,211 and Rs. 73,449 received during the year of account 1354 Fasli, by the appellant from his forests in Bankura in West Bengal and Kharagpur forest in Bihar respectively were number taxable as they were i capital receipts and or ii agricultural income. The appellant preferred appeals to the Appellate Assistant Commissioner of Income-tax, Patna, or to the Additional Appellate Assistant Commissioner of Income-tax, Patna Range, Patna, as the case may be, against these assessment orders but the said appeals were dismissed and the orders of assessment were companyfirmed. The appellant carried further appeals against these orders of the Appellate Assistant Commissioners to the Income-tax Appellate Tribunal, Calcutta Bench, but the Tribunal also rejected the appeals and companyfirmed the assessments. The appellant thereupon asked the Tribunal under section 66 1 of the Indian Income-tax Act for reference to the High Court inter alia of the above questions. The Tribunal, however, held that numberquestion of law arose out of these orders and, accordingly, refused to refer the said questions of law as formulated by the appellant or any other question to the High Court and rejected the appellants said reference applications. The appellant then applied to the High Court praying for a direction under section 66 2 of the Indian Income-tax Act, 1922, requiring the said Tribunal to state a case and the High Court directed the Tribunal to state case inter alia on the said questions of law set out hereinabove. The Tribunal accordingly drew up a statement of case and submitted it ta othe High Court, from which the following facts do appea Bankura Forest West Bengal The forest in this area in block is leased out by auction on short terms for lump sums. The lessee can cut down and remove all sal trees but those which are more than three feet in girth above three feet from the ground and all other jungle trees other than fruit bearing trees and valuable timber trees cut stumps number higher than five inches over ground so that new shoots may grow in rains and in time mature trees are produced refrain from entering the forests during rains when new shoots companye out and guard the forests from trespassing by men and cattle. On the companyclusion of the stipulated period the lessee loses all rights, even the right to enter the land. Kharagpur Forest Bihar The income from Kharagpur forest companyes from the three sources, viz., i bamboos, ii sabai grass and iii timber. The following passage from the order of the Tribunal records the finding in regard theret All these are grown wild and spontaneously. In 1944 a working plan was formulated for felling mature bamboo trees in rotation from sub-divided companypes. It cannot be said that any human agency was responsible for either plantation or the growth of the bamboos. The position with regard to sabai grass is more or less the same. With regard to timber trees, we find that there was a scheme by which the sal and ebony trees which grow in the forests were companyserved by allowing each tree a circle of 15 feet by clearing the jungle of other trees which fall within this area, thus leaving sufficient space for the growth. No doubt wells were sunk but they were number for the purpose of watering the trees but were for supplying drinking water for the cartmen and bullocks which go into the forests to bring out the timber It is alleged that companypice work was also undertaken near about 1883 but the only evidence is a government annual administration reportdated 5th October, 1882, of forest administration in Bihar suggesting that private owners should take up growth of companypice forests for being worked in short rotation for fuel supply. There is also letter No. 170 dated 14th April, 1883, of the Commissioner, Bhagalpur Division, addressed to the Manager, Darbhanga Raj, regarding preservation of sal saplings in the forests of neighbouring zamindars Gidhour and Banaily Raj but only in the 1944 companyrespondence there is evidence to show that companypice companypes of sal trees on the higher elevation of rocky hills were proposed to be worked in 7 years From this it is clear that there was numberhuman agency with reference to the production of the plant from the soil although there was some element of human activity with reference to assisting the growth of some of the trees. The High Court heard the reference and delivered one companymon judgment as the questions involved therein were companymon and answered the referred questions in the negative and against the appellant. The appellant thereupon applied for and obtained the requisite certificates of fitness for appeal to this Court as aforesaid and hence these appeals. The High Court decided the referred questions against the appellant mainly on the ground that there was numbermaterial on which to hold that there was any expenditure of human skill and labour upon the land so as to companystitute the income derived therefrom agricultural income within the meaning of its definition in section 2 1 of the Act. The companyservation of the forest by allowing each sal and ebony tree a circle of 15 feet and cutting down of the trees and jungles which fell within that circle leaving sufficient space for growth and the employment of companyservancy staff maintained to look after the forest were number companysidered by the Court sufficient in themselves to companystitute any expenditure of human skill and labour upon the land so as to fall within the dictum of the Privy Council in Raja Mustafa Ali Khan v. Commissioner of Income-tax. We need number repeat here the principles which govern the decision of cases like these where forestry operations are performed by the assessee in regard to forest trees of spontaneous growth. They have been enunciated by us in the judgment just delivered in Commissioner of Income-tax, West Bengal v. Raja Benoy Kumar Sahas Roy. Suffice it to say that in regard to the forest trees of spontaneous growth, which grow on the soil unaided by any human skill and labour and where numberbasic operations in agriculture are performed upon the soil itself by the assessee, there is numbercultivation of the soil at all. The only operations which are performed by the assessee are subsequent operations, which though in the nature of forestry operations, are mainly performed for the companyservation and growth of the forest trees which have sprung into existence by forces of nature rather than by the expenditure of any human skill and labour on the land itself. These subsequent operations though they may have the effect of nursing and fostering the growth of such forest trees have numberhing in companymon with the basic operations which are the efficient cause of raising these products from the soil and cannot companystitute agricultural operations unless they form part and parcel of and integrate themselves with such basic operations. The operations which were performed by the assessee in the cases before us had numberhing in companymon with the basic agricultural operations and did number have the effect of companyverting the forest produce which was of spontaneous growth into produce raised upon the land by agriculture within the companynotation of that term as laid down by us in the decision referred to above. We are, therefore, of opinion that the High Court was right in the decision to which it came and the questions were rightly answered by it against the appellant and these appeals of the appellant must be dismissed with companyts.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATTE JURISDICTION Civil Appeal No. 329 of 1956. Appeal by special leave from the decision dated April 29, 1954, of the Labour Appellate Tribunal, Lucknow, in Appeal No. III-97 of 1953 arising out of the Award dated January 24, 1953, made by the Central Government Industrial Tribunal, Calcutta, in Appli- cation No. 106 of 1952. R. L. Iyengar and B. C. Misra, for the appellant. Veda Vyasa, K. L. Mehta and I. S. Sawhney, for the respond- ent. 1957. September 17. The following Judgment of the Court was delivered by BHAGWATIJ.-This appeal with special leave is directed against the decision of the Labour Appellate Tribunal of India, Lucknow, companyfirming, on appeal, the award made by the Central Government Industrial Tribunal, Calcutta, in a dispute between the appellant and the respondent. The appellant took up service with the respondent then knownm the Bharat Bank Ltd., with effect from July 1, 1944, as an Inspector at Bombay in the grade of Rs. 170-10-200-20- 400 and was given three increments when the first increment fell due as from October 1, 1945. He was also given promo- tions on October 1, 1946, and on October 1, 1947, and was drawing Rs. 240 per month plus a special allowance for a servant -of Rs. 30 per month at the time when he was dis- charged by the respondent on August 5, 1949, on the plea that he had become surplus to the requirement of the re- spondent. The Government of India, Ministry of Labour had by Notification No. LR. 2 273 , dated February 21, 1950, referred for adjudication to the Central Government Indus- trial Tribunal at Calcutta the disputes pending between the various banks and their employees, and the appellants case came up for hearing in the companyrse of those proceedings before the Tribunal which held on December 5, 1950, that the order of discharge of the appellant was illegal and that the respondent should take him back in service as well as pay the appellant his arrears of salary and allowances from the date of discharge. This direction was to be carried out within a month of the date of the publication of the award which was actually published in the Gazette of India Part II, Section 3, page 1143 of December 30, 1950. On January 30, 1951, the respondent preferred an appeal against the said order to the Labour Appellate Tribunal, Calcutta, sitting at Allahabad, which by its decision dated September 25, 1951, upheld the directions given by the Industrial Tribunal and dismissed the appeal. The respond- ent failed and neglected to implement the decision of the Labour Appellate Tribunal within the prescribed period in spite of the appellants intimating to the respondent by his letter dated October 10, 1951, at its address at 37, Faiz Bazar, Delhi, that he was at Bombay and that he would like to know where he should report himself for duty. By this letter he also claimed arrears of salary and allowances which had number till then been paid to him, apart from the payments made under the interim orders of the Labour Appel- late Tribunal. The respondent did number send any reply to the said letter with the result that the appellant served on the respondent a numberice on November 5, 1951, through his solici- tors intimating that the respondent had failed and neglected to reinstate the appellant inspite of his letter dated October 10, 1951, requesting it to do so. The appellant further intimated to the respondent that by reason of its failure to reinstate him within the prescribed period the respondent had companymitted a breach of the directions of the Labour Appellate Tribunal and the appellant had therefore become entitled to companypensation for the same. The appellant therefore called upon the respondent to pay to him a sum of Rs. 32,388 as the amount of companypensation to which he was entitled on account of the pay he would have earned till his 55th year, i.e., upto May 4, 1960, Provident Fund companytribu- tion on pay at 6 1/4 as allowed by the Rules of the Bank and gratuity for about 16 years from July 1, 1944, to May 4, 1960, at months pay per year of service, adjustment being made at 6 per annum for payment, if made as demanded. This amount was exclusive of other claims against the respondent such as amounts due to him under the order dated February 17, 1951, of the Labour Appellate Tribunal of India, Allaha- bad, arrears of salary etc., withheld by the respondent. A,-, the respondent failed and neglected to send any reply to the said numberice or to companyply with the requisitions therein companytained, the appel- lant made an application to the Government of India on February 22, 1952, for recovery of money under s. 20 1 of the Industrial Disputes Appellate Tribunal Act, 1950 hereinafter referred to as the Act to which he re- ceived a reply on May 13, 1952, stating that an application for recovery of money under that section companyld be enter- tained only if it was companyfined to the arrears of salary and allowances from the date of his discharge upto the date of the application, and advising him to submit a revised appli- cation accordingly. A suggestion was also made in that letter that the appellant might approach the Industrial Tribunal, Calcutta, under s.20 2 of the Act for a companyputa- tion in terms of money of the benefit of reinstatement, as it was only when a definite sum had been so determined that action for recovery under s. 20 1 of the Act companyld be taken by the Government. It appears that in the meantime the respondent had trans- ferred its banking business under an agreement with the Punjab National Bank Ltd., and had also changed its name to Bharat Nidhi Ltd. By its letter dated April 3, 1952, the respondent in its new name of the Bharat Nidhi Ltd., ad- dressed a letter to the appellant stating that due to the transfer of its liabilities and equivalent assets to the Punjab National Bank Ltd., and the closure of all its branches in India, the appellant was surplus to its require- ments. It therefore purported to give to the appellant two months numberice of its intention to terminate the said award and his services in terms of s. 19 6 of the Industrial Disputes Act, 1947. The letter further proceeded to state that the appellant had number so far reported himself for duty at -its office at Delhi which was the only office that it had in India since March 10, 1951, and which was its Head Office and registered office before that date. The appel- lant replied by his Advocates letter dated April 16, 1952, pointing out that in spite of his letter dated October 10, 1951, addressed to the respondent the latter had number in- formed him as to when and where he should report for duty number had it cared to respond to the same. He intimated that he had already made an application to the Government of India under s. 20 1 of the Act and was awaiting the result thereof. The letter dated April 3, 1952, addressed by the respondent to the appellant was under the circumstances characterized by the appellant as evidently addressed to him with some ulte- rior motive. The respondent by its letter dated May 10, 1952, addressed to the appellant reiterated that in spite of its asking the appellant to do so, he had failed to join its office. It stated that by its letter dated April 3, 1952, it had clearly asked the appellant to join at Delhi but that the appellant had failed to do so and the companyduct of the appellant clearly amounted to evasion of its instructions and absence from duty. It also stated that the numberice dated April 3, 1952, had effect from the date of receipt thereof by the appellant, viz., April 9, 1952. No further reply was made by the appellant to the aforesaid letter but it appears that on June 28, 1952 the respondent addressed a letter to the Under Secretary, Government of India, New Delhi, in answer to a companymunication dated June 12, 1952, addressed by the latter to it that the appellant had already been paid arrears of his pay and allowances awarded by the Tribunal, that he was further asked by it to resume duty which he had failed to do, and, in the circumstances be was being companysid- ered absent from duty. A companyy of the letter dated May 10, 1952, addressed by it to the appellant as also a companyy of the letter of the same date addressed to the Chief Labour Com- missioner Central , New Delhi, were enclosed therewith for information. Nothing further transpired and on October 8, 1952, the appellant filed the petition under s. 20 2 of the Act for companyputation of the money value of the benefit of reinstatement because of number-implementation of the direc- tions companytained in the award by the respondent. He claimed a sum of Rs. 47,738 companyputed in the mariner indicated in annexure D to that petition. The respondent filed its written statement on December 4, 1952, wherein the only plea taken was that there was a flagrant violation by the appellant of its instructions to join duty and that thereby the appellant had forfeited his right to claim reinstatement and all benefits flowing therefrom. It further stated that without prejudice and with a view to close his case it had offered him salary upto June 19, 1952, by its letter dated November 15, 1952, under intimation to the Conciliation Officer, Central Gov- ernment, New Delhi, but the appellant had number replied to the same. The respondent further companytended that the award in question was in force for -only one year under s. 19 3 of the Industrial Disputes Act, 1947, and that the same was therefore numberlonger in force and the respondent had already terminated the same. The claim of the appellant was there- fore illegal and preposterous and the respondent prayed that the petition be dismissed with companyts. The petition came up for hearing before the Central Govern- ment Industrial Tribunal at Calcutta and it was observed that there were three aspects of the case, viz., i whether the respondent refused to implement the award or the subse- quent decision of the Labour Appellate Tribunal by number taking the appellant in service as directed by the Tribunals as urged on behalf of the appellant ii whether it was the petitioner who failed to resume his duty in spite of having been asked to do so and thereby forfeited the right companyferred upon him in terms of the award as urged by the respondent iii To what relief or companypensation in lieu of reinstatement the petitioner was entitled in the peculiar circumstances in which Bharat Bank ceased functioning soon after the award of December, 1950, and in the light of various other applications of other employees in which only retrenchment relief was awarded. On the first two questions the Industrial Tribunal held in favour of the appellant and then proceeded to companysider the third question, viz., as to what relief or companypensation in lieu of reinstatement the appellant was entitled to. After discussing the legal position it came to the companyclusion that the measure of damages was that laid down under s. 95 of. the Code of Civil Procedure which put it at a figure of Rs. 1,000. It therefore assessed the value of rein. statement asked for at the sum of Rs. 1,000 and awarded that sum under s. 20 2 of the Act. The other prayers of the appellant regarding arrears were number dealt with by the Industrial Tribunal in so far as they were the subject- matter of the application under s. 20 1 of the Act which the appellant had already made to the Central Government. The appellant being, aggrieved by the award of the Industri- al Tribunal carried an appeal to the Labour Appellate Tribu- nal of India at Lucknow. A preliminary objection was taken by the respondent before the Labour Appellate Tribunal that the appeal was number companypetent under the provisions of s. 7 of the Act. This objection found favour with the Labour Appel- late Tribunal and holding that numbersubstantial question of law was raised by the award it dismissed the appeal as incompetent. The appellant applied for and obtained special leave to appeal against this decision of the Labour Appel- late Tribunal and that is bow the present appeal is before us. The two questions of fact, viz., i whether the respondent refused to implement the award by number taking .the appellant back in service and ii whether it was the appellant who had failed to resume his duty in spite of having been asked to do so and thereby forfeited the right companyferred upon him in terms of the award are companycluded by the findings arrived at by the Industrial Tribunal after due companysideration of the companyrespondence which passed between the parties. We also have perused the said companyrespondence and we see numberreason to disturb those findings. If therefore the appellant was ready and willing to be reinstated in the service of the respondent and was number guilty of any default in the matter of reporting himself for duty, the only question that re- mains to be companysidered by us here is what is the amount at which this benefit of reinstatement which was awarded to the appellant should be companyputed within the meaning of s. 20 2 of the Act. That was the only scope of the enquiry before the Industrial Tribunal and we have to determine what is the companyrect method of such companyputation. Section 20 2 of the Act reads as follows-- Section 20.- Recovery of money due from an employer under an award or decision. 1 Where any workman is entitled to receive from the empoly- er any benefit under an award or decision of an industrial tribunal which is capable of being companyputed in terms of money, the amount at which such benefit should be companyputed may, subject to the rules made under this Act, be determined by that industrial tribunal, and the amount so determined may be recovered as provided for in subsection 1 . It may be numbered that sub-section 1 above referred to provides that- any money due from an employer under any award or decision of an industrial tribunal may be recovered as arrears of land revenue or as a public demand by the appropriate Gov- ernment on an application made to it by the person entitled to the money under that award or decision. The petition of the appellant proceeded on the basis that the benefit of reinstatement which he was entitled to re- ceive under the terms of the award was capable of being companyputed in terms of money and that position was number disput- ed by the respondent. Even though there was numberplea by the respondent in its written statement that there were any circumstances which made it impossible for the respondent to reinstate the appellant in its service except the failure of the appellant to resume his duty in spite of his having been asked to do so, the respondent. was allowed to lead evidence in regard to the transfer of its liabilities and equivalent assets to the Punjab National Bank Ltd., and the closure of its banking business in all of its branches in India in order to show that the respondent was number in default and the value of the benefit of reinstatement in terms of money had thus dwindled into insignificance. Reliance was placed on the further circumstance that the Punjab National Bank Ltd., was number under any obligation to take into its employ the employees of the respondent, that as a matter of fact only 10 of the employees of the respondent bad been absorbed by the Punjab National Bank Ltd., and in regard to the rest who were number so absorbed the only sums awarded to them by the Industrial Tribunals were salary for the numberice month. and retrenchment companypensation. We are of opinion that these circumstances cannot be availed of by the respondent. It is numberdoubt true that the respond- ent transferred its liabilities and equivalent assets to the Punjab National Bank Ltd., some time in March 1951. The companyrespondence which was carried on between the appellant and the respondent however shows that in spite of such transfer to the Punjab National Bank Ltd., and the change of the name of the respondent from the Bharat Bank Ltd., to Bharat Nidhi Ltd., the respondent never companytended that Bharat Nidhi Ltd. was number in a position to reinstate the appellant in its service. The companyrespondence proceeded all along on the footing that Bharat Nidhi Ltd., was in a posi- tion to reinstate the appellant in its service and as a matter of fact took up the plea that it had invited the appellant to join it at Delhi but that the appellant bad failed and neglected to do so. Not only in its letter dated May 10, 1952, did the Bharat Nidhi Ltd., state that the appellants failure to join it at Delhi amounted to absence from duty but as late as June 28, 1952, in its letter ad- dressed to the Under Secretary to the Government of India, New Delhi, it reiterated that the appellant was asked to resume duty which he had failed to do and that in the cir- cumstances he was being companysidered as absent from duty. It is clear therefore that the Bharat Nidhi Ltd., was all the time insisting that the appellant should join its service at Delhi and never took up the plea that the transfer of its liabilities and equivalent assets to the Punjab National Bank Ltd., and also the possibility of the Punjab National Bank Ltd., number absorbing the appellant in its employ were circumstances available to it by way of defence. The appel- lant having become surplus to its requirement was of companyrse a plea taken by it in the companyrse of the companyrespondence and by its letter dated April 3, 1952, the Bharat Nidhi Ltd., gave the appellant two months numberice of its intention to terminate the award and service of the appellant. In this behalf it also relied on the provisions of s. 19 6 of the Industrial Disputes Act, 1947, but when it came to file its written statement it did number put forward that plea as an answer to the claim of the appellant under s. 20 2 of the Act. We fail to understand therefore how these circum- stances companyld ever have been taken into companysideration by the Industrial Tribunal while arriving at the companyputation in terms of money of the benefit of reinstatement awarded to the appellant under the terms of the award. Such companyputa- tion has therefore got to be made regardless of those cir- cumstances which were put forward by the respondent as a last resort. The Industrial Tribunal companyputed the money value of this benefit on the analogy of s. 95 of the Code of Civil Proce- dure. It treated the number-implementation of the direction in the -award made by an Industrial Tribunal on a par with the obtaining of arrest, attachment or injunction on insuffi- cient grounds and awarded to the appellant the sum of Rs. 1,000 which it deemed to be a reasonable companypensation for the injury caused to him. Even if the direction given by the Industrial Tribunal in its award be treated as a statu- tory obligation imposed on the respondent, this certainly companyld number be a measure of companypensation or damaoes and it was fairly companyceded by the learned companynsel for the respondent that he was number in a position to support that part of the judgment. Mr. lyengar who appeared for the appellant before us urged that the companyputation of the money value of the benefit of reinstatement awarded to the appellant should be made on one or the other of the three bases which he suggested for the purpose, viz., i the order of reinstatement should be companystrued as entitling the appellant to the full tenure of service in accordance with the terms of the original company- tract and the appellant should be awarded companypensation companymensurate with the salary and the benefits which he would have earned during his service with the respondent for the full term of 55 years which was the age of superanntiation the number-implementation of the direction as to reinstatement should be treated as a breach of companytract on the part of the respondent and the appellant should be awarded damages for breach of the companytract which would be calculated again on the same, basis iii the number-implemen- tation should be treated as a breach of a statutory duty and the appellant should be awarded damages for number-implementa- tion as on a tort companymitted by the respondent. The appel- lant would in that event be entitled number only to general damages but also special damages by reason of oppressive companyduct on the part of the respondent. The position- as it obtains in the ordinary law of master and servant is quite clear. The master who wrongfully dismisses his servant is bound to pay him such damages as will companypensate him for the wrong that he has sustained. They are to be assessed by reference to the amount earned in the service wrongfully terminated and the time likely to elapse before the servant obtains another post for which he is fitted. If the companytract expressly provides that it is terminable upon, e.g., a months numberice, the damages will ordinarily be a months wages No companypensa- tion can be claimed in respect of the injury done to the servants feelings by the circumstances of his dismissal, number in respect of extra difficulty of finding work resulting from those circumstances. A servant who has been wrongfully dismissed must use diligence to seek another employment, and the fact that he has been offered a suitable post may be taken into account in assessing the damages. Chitty on Contracts, 21st Ed., Vol. 2 , p. 559 para. 1040 . If the companytract of employment is for a specific term, the servant would in that event be entitled to damages the amount of which would be measured prima facie and subject to the rule of maitigation in the salary of which the master had deprived him. Vide Collier v. Sunday Referee Publishing Co., Ltd. 1 . The servant would then be entitled to the whole of the salary, benefits, etc., which he would have earned had be companytinued in the employ of the master for the full 1 1940 4 All E.R. 237. term of the companytract, subject of companyrse to mitigation of damages by way of seeking alternative employment. Such damages would be recoverable by the servant .for his wrongful dismissal by the master only on the basis of the master having companymitted a breach of the companytract of employ- ment. If, however, the companytract is treated as subsisting and a claim is made by the servant for a declaration that he companytinues in the employ of the master and should be awarded his salary, benefits, etc., on the basis of the companytinuation of the companytract, the servant would be entitled to a declara- tion that he companytinues in the employ of the master and would only be entitled to the payment of salary, benefits, etc., which accrued due to him up to the date of the institution of the suit. The benefit of reinstatement which is awarded to a workman under the terms of the award does number become a term or companydition of the companytract between him and the employer. There are numberdoubt other reliefs by way of changes in the terms and companyditions of employment which when awarded by the appropriate tribunal might be treated as implied terms of the companytract between the employer and the workers to whom the award applies and would enure for the benefit of the worker until varied by appropriate legal proceedings. There is numberstatutory provision in that behalf companytained in the Industrial Disputes Act, 1947. But it is interesting to numbere that in the Industrial Disputes Order, 1951, obtaining in England there is enacted s. 10 which runs as follows Section 10 Award to be implied term of companytract Where an award on a dispute or issue has been made by the Tribunal then as from the date of the award or from such other date, number being earlier than the date on which the dispute or issue to which the award relates first arose, as the Tribu- nal may direct, it shall be an implied term of the companytract between the employer and workers to whom the award applies that the terms and companyditions of employment to be observed under the companytract shall be in accordance with the award until varied by agreement between the parties or by a subse- quent award of the Tribunal or until different terms and companyditions of employment in respect of the workers companycerned are settled through the machinery of negotiation or arbitration for the settlement of terms and companyditions of employment in, the trade or industry or section of trade or industry or undertaking in which those workers are employed. Whatever be the position in regard to the terms and companydi- tions of employment thus varied in accordance with the terms of the award, the benefit of reinstatement awarded to a workman certainly cannot be treated as part of the companytract between him and the employer. The effect of an order of reinstatement is merely to set at numberght the order of wrong- ful dismissal of the workman by the employer and to rein- state him in the service of the employer as if the Contract of employment originally entered into had been companytiuning. The terms and companyditions of the companytract which obtained when the workman was in the employ of the employer prior to his wrongful dismissal which has been set aside companytinue to govern the relations between the parties and the workman companytinues in the employ of the employer under those terms and companyditions. There is numbervariation of those terms and companyditions of the companytract. The only thing which happens is that the workman is reinstated in his old service as before. The monetary value of the benefits of such reinstatement is therefore to be companyputed number on the basis of a breach of the companytract of employment number on them basis of a tort alleged to have been companymitted by the employer by reason of the number- implementation of the direction for reinstatement companytained in the award. The analogy of a suit for a declaration that the workman is companytinuing in the employ of the employer and that he should be paid the safary and benefits, etc., which would have been earned by him up to the date of the institu- tion of the suit also does number strictly apply for the simple reason that the workman here is number asking for a declaration that-he is still companytinuing in service on the ground that there was a termination of his service after the award, which termination is void. What he is asking for is a companyputation in terms of money of the benefit of reinstatement which was granted to him by the Industrial Tribunal and which the employer did number implement. The purpose of the enactment of s. 20 2 of the Act is number to award to the workman companypensation or damages for a breach of companytract or a breach of a statutory obligation on the part of the employer. Any money which is due from an em- ployer under the award can by virtue of the provisions of s. 20 1 of the Act be recovered by the appropriate Government on an application made to it by the workman. Where however any benefit which is number expressed in terms of money is awarded to the workman under the terms of the award it will be necessary to companypute in terms of money the value of that benefit before the workman can ask the appropriate Govern- ment to help him in such recovery. Section 20 sub-s. 2 provides for the companyputation in terms of money of the value of such benefit and the amount at which such benefit should be companyputed is to be determined by the Industrial Tribunal to which reference would be made by the appropriate Govern- ment for the purpose. Such companyputation has relation only to the date from which the reinstatement of the workman has been ordered under the terms of the award and would have to be made by the Industrial Tribunal having regard to all the circumstances of the case. The Industrial Tribunal would have to take into account the terms and companyditions of em- ployment, the tenure of service, the possibility of termina- tion of the employment at the instance of either party, the possibility of retrenchment by the employer or resignation or retirement by the workman and even of the employer him- self ceasing to exist or of the workman being awarded var- ious benefits including reinstatement under the terms of future awards by Industrial Tribunals in the event of indus- trial disputes arising between the parties in the future. Even in the case of ordinary companytracts between master and servant such companysiderations have been imported by the companyrts. The observations of Greer, J., in Salt v. Power Plant Co., Ltd. 1 are apposite in this companytext This is the case of a man who had, according to my view, got an engagement which was to last for life, or at any rate for the joint lives of himself and the companypany, but I think for his life, because, I think there are authorities to the effect that if a companypany winds up, that is a dismissal of the servants, and they can then prove for damages and get their dividend, whatever it may happen to be. Fortunately, the companypany has number been wound up, but in estimating the damages, of companyrse, the tribunal estimating them will have to take into companysideration the fact that at any time after June 26, 1935, it might have appeared to the directors that they had good reasons for terminating the plaintiffs serv- ices, reasons companynected with his companyduct. The present value of what his salary would be for the rest of his life must also be companysidered, and there must also be taken into ac- companynt the fact that he is a man who might at any time termi- nate his service by his life companying to an end, and other matters with which I need number deal. These and similar companysiderations would equally be germane in the matter of the companyputation in terms of money of the value of the benefit of reinstatement which was awarded to the appellant in the case before us. Turning therefore to the terms and companyditions of employment we find that the respondent had enacted bye-laws for the employees of Bharat Bank Ltd., which were applicable to the appellant. Bye-law 9 provides that an employee may resign from the service of the respondent by giving one months numberice. Bye-law 11 provides that the respondent shall have the option to terminate an employees service on giving him the same numberice as he is required to give to the respondent under rule No. 9 which can be served even when the employee may be on leave , or by paying him salary for the numberice period in lieu of numberice, in the absence of an agreement to the companytrary, provided that numbernotice shall be necessary when he is 1 1936 3 All E.R. 322, 325. dismissed on account of misconduct, dishonesty, gross negli- gence, insubordination or disregard of any of the standing instructions. Bye-law 13 lays down that every employee is required to retire on attaining the age of 55 years. He may be retained in service after that age only with the express sanction of the authorities but such extension of service will number exceed more than 2 years at a time. If regard be had to these terms and companyditions, it was possible for the respondent to terminate the service of the appellant by paying him one months salary in lieu of number tice. If there was numberhing more the appellant would have been entitled only to that amount as and by way of companypensa- tion for numberimplementation of the direction for reinstate- ment. There was however a finding recorded by the Industri- al Tribunal which made the award dated December 5, 1950, that the respondent had been guilty of unfair labour prac- tice and victimization and the ordinary right, which the respondent would have been in a position to exercise, of terminating the service of the appellant on giving him one months salary in lieu of numberice companyld number be availed of by the respondent. On an industrial dispute raised by the appellant on the respondents terminating his service at any time in the future, it would be open to the Industrial Tribunal to go into the question whether the termination of the appellants service by the respondent was justified and if the Industrial Tribunal came to an adverse companyclusion, it would be open to it to reinstate the appellant in the serv- ice of the respondent with all back salary, allowances, etc. Even if the respondent wanted to retrench the appellant, the same companysiderations would arise with a possible result against the respondent. On the other hand, there was also a possibility of the respondent being in the right and being entitled to lawfully terminate the service of the appellant in which event of companyrse the appellant would be without any redress whatever. In companyputing the money value of the benefit of reinstatement the Industrial Tribunal would also have to take into account the present value of what his salary, benefits, etc would be till he attained the age of superannuation and the value of such benefits would have to be companyputed as from the date when such reinstatement was ordered under the terms of the award. Having regard to the companysiderations detailed above it is impossible to companypute the money value of this benefit of reinstatement awarded to the appellant with mathematical exactitude and the best that any Tribunal or Court would do under the circumstances would be to make as companyrect an estimate as is possible bearing of companyrse in mind all the relevant factors pro and company. We have ourselves devoted very anxious thought to this aspect of the matter and we have companye to the companyclusion that having regard to all the circumstances of the case it would be reasonable to companypute the benefit of reinstatement which was awarded to the appel- lant at an amount of Rs. 12,500 Rupees twelve thousand and five hundred only . We accordingly allow the appeal and set aside the decision of the Labour Appellate Tribunal of India, Lucknow as well as the award made by the Central Government Industrial Tribunal, Calcutta and award that the appellant shall recov- er from the respondent the said sum of Rs. 12,500 Rupees twelve thousand and five hundred only being the companyputation of the money value of the benefit of reinstatement awarded to him under the terms of the award of the Central Govern- ment Industrial Tribunal at Calcutta dated December 5, 1950.

Case appeal was accepted by the Supreme Court

CIVIL APPFLLATE JURISDICTION Civil Appeal No. 8 of 1957. Appeal from the judgment and order dated the 30th August, 1955, of the Allahabad High Court in Special Appeal No. 8 of 1955 arising out of the judgment and order dated the 10th December, 1954, of the Single Judge of the Allahabad High Court in Civil Misc. Writ No. 1245 of 1954. S. Narula, for the appellant. B. Tawakley and K. P. Gupta, for the respondent. 1957. September 17. The following Judgment of the Court was delivered by K. DAS, J.-This appeal has been preferred to this Court on the strength of a certificate granted by the High Court of Allahabad on February 3, 1956, to the effect that the case is a fit one for appeal to the Supreme Court under Art. 133 1 c of the Constitution. The question that falls for decision is the true scope, meaning and effect of cl, g of s. 13-D of the U. P. Municipalities Act, 1916 U. P. II of 1916 , hereinafter referred to as the Act. The relevant facts, which are number number in dispute, are these. There was a general election to the Municipal 54 Board of Bareilly in October, 1953. The appellant, Mangoo Singh, and respondent No. 3, Imdad Husain, along with sever- al others, were candidates at the said election from Ward No. 15. The date fixed for filing numberinations was October 5, 1953, and the date for scrutiny of the numberinations filed was October 7, 1953. The appellant and respondent No. 3 both filed their numberinations on the due date, and at the time of scrutiny lmdad Husain raised an objection to the numberination of the appellant on the ground that the latter was disqualified under cl. g of s. 13-D of the Act for being chosen as a member of the said Municipal Board because he was in arrears in the payment of municipal tax in excess of one years demand. This objection was dismissed, and the numberination of the appellant was accepted by the Assistant Returning Officer. The poll took place on October 26, 1953, and the companynting of votes was done on October 29, 1953. Four persons were to be elected from the said Ward, and the appellant was the third in the list by reason of the number of votes which he had obtained. Imdad Husain was fifth in the list. Accordingly, the appellant was declared as one of the returned candidates, and lmdad Husain was at the top of the unsuccessful candidates. lmdad Husain then filed an election petition to set aside the election of the present appellant on various grounds. The only ground with which we are number companycerned is the disqualification under cl. g of s. 13-D of the Act. This election petition was heard by the Election Tribunal and by its judgment dated October 20, 1954, the Election Tribunal held that the appellant was in arrears in the payment of municipal tax in excess of one years demand to which s. 166 of the Act applied and, there- fore, came under the disqualification in cl. g of s. 13-D of the Act It further held that the payment of a sum of Rs. 115-3-0 on October 10, 1953, five days after the date fixed for the filing of numberinations, did number wipe off that dis- qualification, and the appellant was number entitled to the benefit of the second proviso to s. 13-D of the Act. It may be here stated that the Election Tribunal also held that numberbill for payment of the tax was presented to the appellant as required by s. 166, number was any demand numberice served on him as required by s. 168 of the Act. On the above find- ings, the Tribunal allowed the election petition, set aside the election of the appellant and declared a casual vacancy under cl. a of sub-s. 2 of s. 25 of the Act, which vacancy was subsequently filled up by the election of the third respondent on April 5, 1955. The next general elec- tion in the Municipality is due in October, 1957. Against the decision of the Election Tribunal, the appellant moved the High Court of Allahabad for the issue of a writ under Art. 226 of the Constitution. The main point urged by the appellant was that the Election Tribunal was in error in its interpretation of cl. g of s. 13-D of the Act. Cha- turvedi J. who dealt with the application of the appellant, agreed with the view of the law as expressed by the Election Tribunal and dismissed the application. The appellant then preferred an appeal to a Division Bench of the said High Court. This appeal was also dismissed by Agarwala and Sahai JJ. by their judgment dated August 30, 1955. The appellant then moved and obtained a certificate of fitness under Art. 133 1 c of the Constitution from the said High Court. Learned companynsel for the appellant has number companytested any of the findings of fact arrived at by the Election Tribunal and has companyfined his submissions to the question of the true companystruction of cl. g of s. 13-D of the Act. Therefore, it is necessary to read that section, in so far as it is relevant for our purpose 13 -D. Disqualifications for membership.-A person, number- withstanding that he is otherwise qualified, shall be dis- qualified for being chosen as, and for being, a member of a board if he- a b c d e f g is in arrears in the payment of municipal tax or other dues in excess of one years demand to which section 166 applies Provided further that in the case of g the disqualifica- tion shall cease as soon as the arrears are paid. The first companytention of learned companynsel for the appellant relates to and arises out of the expression for being chosen as occurring in the section. The argument is this. It is submitted that a person is chosen as a member of a board when the poll takes place and a majority of voters vote for him as their chosen candidate therefore, the relevant date for the operation of the disqualification is the date of the poll, and inasmuch as on October 10, 1953, which was several days before the date of the poll, the appellant was numberlonger in arrears of municipal tax in excess of one years demand by reason of the payment made on that date, the disqualification did number attach to him on the date of the poll. We are unable to accept this argument. It is worthy of numbere that an identical expression shall be disqualified for being chosen as occurs in Art. 102 of the Constitution and s. 7 of the Representation of the People Act, 1951. This expression occurring in s. 7 of the Repre- sentation of the People Act, 1951, was companysidered by this Court in Chatturbhuj Vithaldas Jasani v. Moreshwar Parashram and Others 1 . In that case the question was when the disqualification mentioned in cl. d of s. 7 of the Repre- sentation of the People Act, 1951, arose and it was held that the date for putting in the numberinations was one of the crucial dates. On this point, the following observations made in that case are apposite Now the words of the section are shall be disqualified for being chosen. The choice is made by a series of steps starting with the numberination and ending with the announce- ment of the election. It follows that if a disqualification attaches to a candidate at any one of these stages, he cannot be chosen. 1 1954 S.C.R. 817, 821. It was pointed out in N. P. Ponnuswami v. The Returning Officer, Namakkal Constituency and Others 1 that elec- tion is a companytinuous process companysisting of several stages and embracing many steps of which numberination is one numberina- tion is the foundation of a candidates a right to go to the polls and must be treated as an integral part of the elec- tion. If a person is disqualified on the date of numberina- tion, he cannot be chosen as a candidate because the dis- qualification mentioned in s. 13-D attaches to him on that date. This is also clear from para. 22 2 of the U. P. Municipali- ties Conduct of Election of Members Order, 1953. That sub-para. states- 22 2 -The Returning Officer shall then examine the numberi- nation papers and shall decide all objections, which may be made to any numberination, and may, either on such objection or on his own motion, after such summary inquiry, if any, as he thinks necessary, refuse any numberination on any of the fol- lowing grounds a that the candidate is number qualified to be chosen to fill the seat under the Act or b that the candidate is disqualified for being chosen to fill the seat under the Act or c that there has been any failure to companyply with any of the provisions of paras. 16 and 17 or d that the signature of the candidate or any proposer or seconder is number genuine or has been obtained by fraud. If the disqualification of cl. g of s. 13-D of the Act is to companye into operation only oil the day of the poll, then it is quite unnecessary for the Returning Officer to companysider that disqualification at the time of scrutiny and indeed it will be improper for him to refuse numberination on the ground of such disqualification. Clause b of para. 22 2 uses the same expression disqualified for. being chosen- showing clearly enough that the starting point of the act of choosing is number on the date of the poll only. The process of choosing companymences on the date of filing numberinations. 1 1952 S.C. R. 218. We number turn to the second proviso to s. 13-D. The submis- sion of learned companynsel for the appellant is that, as stated in the proviso, the disqualification is transient and ceases to operate as soon as the arrears are paid Oil October 10, 1953, the appellant was numberlonger disqualified and, there- fore, he companyld be chosen on the date of the poll, that is, on October 26, 1953. The argument is that in the case of such a transient disqualification, the second proviso must be so read as to mean that a disqualification subsisting on the day of numberination can be wiped off companypletely by subse- quent payment of arrears of tax otherwise a disqualifica- tion at the time of numberination will disentitle a person to stand for election even though it ceases to operate before the day of the poll. This argument also we cannot accept as companyrect it is really the first argument in a different form. The wiping off of the disqualification under the second proviso has numberretrospective effect, and the disqual- ification which subsisted on the day of filing numberinations did number cease to subsist on that day by reason of a subse- quent payment of the arrears of municipal tax. On this point we accept as companyrect the view expressed in Ahmed Hossain v. Aswini Kumar 1 , where a similar question under the Bengal Municipal Act Ben. XV of 1932 , fell for company- sideration. The question was if a person disqualified on the date of numberination companyld shake off his pre-existing disqualification by acquiring a new right between the date of numberination and the date of scrutiny. What happened in that case was this on the material date, that is, the last date for submission of numberinations, a person was in arrears for more than three months in payment of the tax which he was liable to pay, and he came within the mischief of el. g of amended a. 22 1 of the Bengal Municipal Act. The companytention was that the name of the Press of which the candidate was the proprietor and number his name was recorded in the books of the Municipality as the assessee and that the name of the candidate was in the electoral -roll by reason of his educational qualifications. This companytention was repelled and it was A.l.R. 1953 Cal. 542. observed that if a person was disqualified on the date of the numberination, he companyld number shake off his preexisting disqualification by acquiring a new right between the date of numberination and the date of scrutiny. There is also other judicial authority which, supports the same view. In Harford v. Linskey 1 , a similar question arose for deci- sion under the Municipal Corporations Act, 1882, s. 12 whereof enacted that a person shall be disqualified for being elected and for being a companyncillor if and while he is interested in companytracts with the Corporation. The peti- tioner in that case admitted that at the time of his numberina- tion he was interested in companytracts with the Corporation, but companytended that he companyld and would have got rid of his disqualification before the day fixed for the poll, and was therefore number disqualified for numberination. The question was whether he was so disqualified. Wright J. delivering the judgment of the Court observed- In the absence of any guide, we think it safest to hold that in cases of elections under the Municipal Corporations Acts a - person, who at the time of numberination is disquali- fied for election in the manner in which this petitioner was disqualified, is disqualified also for numberination. The numberination is for this purpose an essential part of the election, and if there are numbercompetitors it of itself companystitutes the election by virtue of the express words of s. 56. A different companystruction might produce much companyfu- sion. On the numberination day numberone companyld know whether the persons numberinated will at the poll be effective candidates or number. It is true that in the case put the disqualifica- tion may be removed before the election is companypleted but what is to be the effect if the disqualification companytinues until the poll begins, or until the middle of the polling day, or until the close of the poll ? Will votes given before the removal of the disqualification be valid? If number how is the number of them to be ascertained ? it seems to us unreason able to hold that the Act means to leave the matter in such a state of uncertainty, and for these reasons 1 1999 1 Q.B. 852, 858. we think that this petitioner was disqualified for numberina- tion or election. The same state of uncertainty and companyfusion, to which a reference has been made in the aforesaid observations, will arise if the companystruction which learned companynsel for the appellant has pressed for our acceptance is adopted in the case before us. Lastly, it has been argued on behalf of the appellant that the expression to which s. 166 applies in cl. g of s. 13-D means that a bill of the sum due must be presented to the person liable for it, as required by that section, before he can companye within the mischief of the clause fur- thermore, the use of the expression demand makes it essen- tial that a demand numberice must also be served as required by s. 168 of the Act. As on the finding of the Election Tribu- nal neither a bill was presented to the appellant, number was he served with a demand numberice, learned companynsel companytends that the appellant does number companye within the mischief of the clause. Sections 166 and 168 are in these terms- S. 166. Presentation of bill.- 1 As soon as a person becomes liable for the payment of- a any sum on account of a tax, other than an octroi or toll or any similar tax payable upon immediate demand, or b any sum payable under clause c of section 196 or section 229 or section 230 in respect of the supply of water, or payable in respect of any other municipal service or undertaking, or c any other sum declared by this Act or or by rule or bye-law to be recoverable in the manner provided by this chapter, the board shall, with all companyvenient speed, cause a bill to be presented to the persons so liable. Unless otherwise provided by rule, a person ,shall be deemed to become liable for the payment of every tax and licence fee upon the companymencement of the period in respect of which such tax or fee is payable, S. 168. Notice of demand.-If the sum for which a bill has been presented as aforesaid is number paid in municipal office, or to a person empowered by a regulation to receive such payments, within fifteen days from the presentation thereof, the board may cause to be served upon the person liable for the payment of the said sum a numberice of demand in the form set forth in schedule IV, or to the like effect. We are clearly of the view that the expression to which s. 166 applies cannot bear the meaning sought to be given to it on behalf of the appellant. That expression merely describes the nature of the demand referred to in cl. g . Section 166 refers to three types of dues el. a of sub -s. 1 refers to any sum on account of a tax other than an octroi or toll or any similar tax payable upon immediate demand cl. b refers to sums payable under el. c of s. 196 or s. 229 or s. 230 in respect of the supply of water, etc., and cl. c refers to any other sum declared by the Act or by rule or bye-law to be recoverable in the manner provided by Chapter VI. The demand to which s. 166 applies must be a demand of the nature or type mentioned in one or other of the aforesaid three clauses, and the demand re- ferred to in el. g of s. 13-D must be of that nature or type this, in our view, is the true meaning and effect of the expression to which s. 166 applies. Nor do we think that the word demand attracts the operation of s. 168. It may be readily companyceded that the word de- mand ordinarily means something more than what is due it means something which has been demanded, called for or asked for. But the meaning of a word must take companyour from the companytext in which it is used. In el. g the companytext in which the word demand is used has a very obvious and clear reference to the amount of arrears or dues on which the disqualification depends therefore, the expression used is- arrears in the payment of municipal tax or other dues in excess of one years demand. The word demand in that companytext and in the companylocation of words in which it has been used can only mean in excess of one years municipal tax or other dues. We have been referred to several meanings of the word demand in standard English dictionaries and law lexicons. When the companytext makes the meaning of a word quite clear, it becomes unnecessary to search for and select a particular meaning out of the diverse meanings a word is capable of, according to lexicographers. It is sufficient for our purpose to state that even in standard dictionaries and law lexicons, it is well recognised that the word demand may mean simply a claim or due, without importing any further meaning of calling upon the person liable to pay the claim or due. For the reasons given above, we hold that number one of the companytentions urged on behalf of the appellant is worthy of acceptance. The election petition was rightly decided, as the appellant was disqualified for being chosen as a member of the Municipal Board in question on the day he filed his numberination, under cl. g of s. 13-D of the Act.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 52 of 1955. Appeal from the judgment and order dated the 15th February, 1955, of the Calcutta High Court in Criminal Appeal No. 40 of 1955 arising out of the judgment and order dated the 22nd January, 1955, of the Additional Sessions Judge, 24 Parganas, Alipore, in Trial No. 1 of January Sessions for 1955. C. Roy Choudhari, K. R. Choudhari and Sukumar Ghosh, for the appellant. C. Mitra, K. B. Bagchi and P. K. Bose, for the respondent. 1957. October 24. The following Judgment of the Court was delivered by SINHA J.-This appeal on a certificate granted by the High Court at Calcutta, under art. 134 1 c of the Constitution, is directed against the order of a Division Bench of that Court, dated February 15, 1955, summarily dismissing an appeal from the judgment and order dated January 22, 1955, passed by the learned Second Additional Sessions Judge of Alipore, accepting the unanimous verdict of guilty returned by the jury holding the appellant guilty under s. 376 of the Indian Penal Code, for having companymitted rape on a young girl, named Sudharani Roy, said to be about 14-15 years of age. The learned trial judge, accepting the unanimous verdict of the jury and agreeing with it, imposed a deterrent punishment of rigorous imprisonment for 5 years, in view of the fact that he was in loco parentis to the large number of girls who were the inmates of the Nari Kalyan Ashram of which the appellant had been the secretary for a pretty long time. The learned companynsel for the State of West Bengal raised a preliminary objection that the certificate granted by the Bench of the Calcutta High Court presided over by the learned Chief Justice, was bad on the face of the judgment given by him while granting the certificate. We have, therefore, first to examine whether the preliminary objection is sound. As already stated, the Division Bench before which the appeal came up for admission, summarily dismissed it without giving any reasons. Apparently, the Bench was number satisfied that there was any error of law or mis-direction in the learned Sessions Judges charge to the jury which had returned a unanimous verdict of guilty against the appellant. On March 7, 1955, the Bench companysisting of Chakravarty C. J. and S. C. Lahiri J. passed the order to the effect that having heard the argument on behalf of the applicant for the certificate of fitness for the proposed appeal to this Court on March 4, they had the opportunity of reading through the charge delivered by the learned trial judge, and that they had companye to feel that before the application is disposed of, we should see the depositions in full. Accordingly, they directed the records of the original trial to be called for and placed before them. The case, therefore, stood adjourned till the arrival of the records. The matter was heard again on March 17, and on March 18, the learned Chief Justice delivered a judgment which appears at pages 220 to 231 of the record. It is a full judgment giving the facts and history of the case and the evidence adduced on behalf of the prosecution. The learned Chief Justice, in the companyrse of his very elaborate judgment, observed that the learned Judge delivered an exhaustive charge to the jury from which he does number appear to have omitted any part of the evidence which was of any materiality whatsoever. The jury appear to have applied their minds critically Having examined the grounds taken in the appeal as presented to the High Court, he made the following observations I have gone through the grounds taken in the petition of appeal to this Court and I have numberhesitation in saying that if those were the grounds urged before the learned Judges, numberone need be surprised that their Lordships saw numberhing arguable or worth attention in the case. Except one, number one of the grounds urged by Mr. Roy Choudhury before us is to be found in the petition of appeal On an examination, in great detail, of the grounds urged before the Bench hearing the application for certificate, the learned Chief Justice observed Mr. Roy Choudhury, however, urged before us six several points. Except one, in respect of which there is something to be said, numbere of them impresses me. It was number clearly indicated in the judgment what that single ground was. The penultimate paragraph of the order passed by the learned Chief Justice, companytains the following We are oppressed by the feeling that there were arguable points, although they might number bear examination and the accused has number had the satisfaction of feeling that he has been fully heard by the Court of appeal. I would therefore grant him the leave he asks for, number because we take any view in his favour of the evidence in the case, but because justice should also appear to have been done and therefore the evidence ought to have received a full companysideration by the appellate Court, although the result might be to companyfirm the companyviction. We have set out the findings of the learned Chief Justice while granting leave to appeal to this Court, in his own words, to appreciate the reasons for granting leave to appeal . It appears that the learned Chief Justice and his brother judge, companytrary to the legal position that one Bench of the High Court has numberjurisdiction to sit in judgment on the decision of another Division Bench, have, in fact, done so. But in the instant case, the learned Chief Justice has gone further and observed that the summary dismissal of the appeal by the Criminal Bench, has number given satisfaction to the appellant that he had been fully heard, and that it did number appear to him that justice had been done. Such observations are number companyducive to the maintenance of a healthy atmosphere for the administration of justice in the highest Court in the State. Furthermore, the observation almost amounts to a companydemnation of the practice of summary dismissal of appeals, especially against orders passed in a case tried by a jury where the appellant has to make out clear grounds of law. Such a practice prevails, so far as we know, in almost all the High Courts in India and has the sanction of the statute law as companytained in the Code of Criminal Procedure. This Court has repeatedly called the attention of the High Courts to the legal position that under Art. 134 1 c of the Constitution, it Is number a case of granting leave but of certifying that the case is a fit one for appeal to this Court. Certifying is a strong word and, therefore, it has been repeatedly pointed out that a High Court is in error in granting a certificate on a mere question of fact, and that the High Court is number justified in passing on an appeal for determination by this Court when there are numbercomplexities of law involved in the case, requiring an authoritative interpretation by this Court. On the face of the judgment of the learned Chief Justice, the leave granted cannot be sustained vide the case of Haripada Dey v. The State of West Bengal 1 , and a number of decisions of this Court referred to therein. In view of those authorities of this Court, it is clear that the certificate granted by the High Court is number a proper one. The preliminary objection is, therefore, upheld. But the appeal having been placed before this Court, we have to satisfy ourselves whether there are any grounds on which this Court would have granted special leave to appeal under Art. 136 of the Constitution. In order to appreciate the grounds raised in support of the appeal by the learned companynsel for the appellant, it is necessary to state the following facts The appellant was the honorary secretary of a large institution for receiving and looking after young girls and women who had numberhomes of their own or had gone astray. It is called the Nari Kalyan Ashram and is located in one of the quarters of the city of Calcutta. The appellant in his capacity as the secretary, used to companye to the Ashram daily in the evening at about 7 p.m., and stay there till mid-night or past mid- night. In his office room, there was a bed-stead with a bedding spread thereon. He used to occupy the bed and requisition the services of girls to massage his body. Between January and April, 1954, the accused who was in the habit of calling the girls named Sudharani, Narmaya, Kalyani and others, for that purpose, is said to have companymitted rape on those girls. The subject-matter of the charge in this case is the offence of rape said to have been companymitted on the two girls Narmaya and Sudharani, one after the other, on the night of April 20, 1954. On April 29, 1954, at about 10 p.m., the officer-in-charge of the Maniktala police station, accompanied by Sub-Inspector Nirmal Chandra Kar, went to the Ashram in companynection with companylecting information regarding the escape of some girls from the Ashram. Narmaya and Sudharani are said to have given information to the said officer-in-charge of the police station, alleging rape on them. They also pointed out a steel locker in the room of the secretary, where, it was alleged, he used to keep rubber sheaths used by him before he had sexual intercourse with each of them. The police officers aforesaid obtained the key from the appellant, with which the steel locker was opened and a leather bag inside the locker was pointed out by the girls. The bag was found to have companytained a rubber sheath along with other articles. After recording the information, the police officer-in-charge of the Maniktala police station, investigated the case and submitted a charge-sbeet against the appellant. After the preliminary inquiry by a magistrate, the appellant was companymitted for trial to the Court of Session on a charge of rape upon the two girls, under s. 376, Indian Penal Code. The defence of the appellant was that the case against him was companypletely false and had been companycocted by the police with the help of the inmates of the Ashram and the Assistant Secretary, Tarun Kumar Sarkar who was one of the prosecution witnesses. At the trial, the prosecution examined 23 witnesses, in support of the case against the accused. The two victims of the alleged outrage by the appellant, were examined, namely, Sudharani Roy, P.W. 2 and Narmaya, P.W. 5, who both deposed that the appellant used to companye to the Ashram in the evening at about 7 p.m., and used to stay there till after mid-night in his special room which companytained a bedstead and a bedding and a steel almirah and other pieces of furniture. On the ate of the occurrence in question, first Narmaya was called in by the appellant and then Sudharani, and the appellant is said to have companymitted rape first on Narmaya and then on Sudharani, in the presence of both of them, against their will and without their companysent. They further deposed that the appellant had intercourse with them after putting on the sheath. In between the two acts, he had a cup of tea with which he swallowed a black pill which is suggested to have been an aphrodisiac. The accused paid them each eight annas and warned them number to divulge those acts on pain of being severely dealt with, if they disclosed the same. Kalyani, P.W. 19, is another young girl who was an inmate of the Ashram on the material dates. She is a girl who was both deaf and dumb, and her intelligence was below numbermal. As she was feeble-minded, she was number allowed to companytinue her studies at the school. She has given evidence by signs which were interpreted by the principal of the Deaf and Dumb School, who had taught her at that school. Her evidence, if accepted, would be a companyroboration of the testimony of the victims aforesaid of the outrageous act of the appellant. Besides this direct oral testimony, there was also evidence tending to show that the appellant was in the habit of having himself massaged at night by the girls of the Ashram, and that the police found a rubber sheath in his bag kept in the steel locker inside his special room. There was also the evidence of a woman employee of the Ashram that she had been asked by the appellant to keep a number of rubber sheaths which she had buried underground, and which on her pointing out, had been discovered by the police. There was also the evidence of a companyplaint made the next day by the victim girls to the assistant secretary when be came to the Ashram in companynection with his work there. The prosecution also led evidence to show the age of the girl Sudharani to be below 16. It produced the register of the girls in the Ashram which has a companyumn for mentioning the age of the inmates. The estimate of her age by medical evidence, was given after X-ray examination and the stage of ossification and other indicia for determining the age of a person. The medical estimate of her age was that she was between 13 and 14 years on the date of the X-ray examination, that is May 19, 1954. That, in barest outline, is the prosecution case and the evidence adduced in support of it. Beyond cross- examining the prosecution witnesses and pointing out companytradictions and omissions in their evidence, the accused did number adduce any positive evidence in support of his defence. The appellant was tried by a jury assisted by the learned Additional Sessions Judge at Alipore. The jury returned a unanimous verdict of guilty against the accused in respect of the charge of companymitting rape on Sudharani and a unanimous verdict of riot guilty in respect of the charge of rape on Narmaya. The jury answered the judges question as regards the charge with respect to Narmaya in these words Not guilty as we found with companysent and she is above 16 years of age. As the jury did number give any such clue in respect of their verdict of guilty so far as rape on Sudharani was companycerned, it is difficult to say whether they found companysent in her case also, and returned a verdict of guilty because they were of the opinion that she was under 16 years of age. In this Court, the learned companynsel for the appellant raised a large number of companytentions, but as most of them companycerned the appreciation of evidence with reference to omissions and companytradictions, it is number necessary to deal with those arguments. It is only necessary to numberice the following points raised, namely, 1 that the learned judge refused permission to companynsel for the appellant to read out the written statement filed on behalf of the appellant at the Sessions stage, 2 that there was a serious misdirection in respect of companyroboration of the testimony of the alleged victims of rape, and 3 that the direction as to the age of the girl Sudharani was number companyplete. In our opinion, there is numbersubstance in any one of these companytentions. Firstly, as regards the refusal to permit the written statement of the accused being placed before the jury, it has to be observed that there is numberprovision in the Code of Criminal Procedure for such a written statement being filed at the Sessions stage. Section 256 2 which occurs in Chapter XXI, headed Of the trial of Warrant- Cases by Magistrates , does companytain the specific provision that if the accused person puts in a written statement, the magistrate shall file it with the record. But there is numbercorresponding provision in the Code, requiring a Sessions Court to accept a written statement at that stage on behalf of the accused. But the accused has the right to make a statement under s. 342 of the Code, which has to be companysidered by the Court for what it is worth. In a jury trial, the Court has got to be circumspect to see that numberhing is allowed to be placed before the jury which is number evidence. It is number necessary to decide whether in the case of a Sessions trial without a jury, such a statement is receivable. But if such a written statement is allowed to be used at a Sessions trial by a jury, it may throw the door open to irrelevant and inadmissible matter and, thus, throw an additional burden on the presiding judge to extricate matter which was admissible from a mass of inadmissible statements which may have been introduced in the written statement. In view of these companysiderations, in our opinion, the learned Sessions Judge rightly refused to allow the written statement put in by the appellant, to be read out before the jury. On the question of companyroboration, the learned judge in his charge to the jury, has, at more than one place, pointed out the necessity of companyroboration of the evidence of the victims of the alleged crime. Referring to the evidence of Kalyani, P.W. 19, aforesaid, the learned judge has charged the jury in these terms whether her evidence is a companyroboration with respect to the companymitting of rape by accused on Sudharani Roy on 20th April, 1954. If the evidence of Kalyani appears unreliable to you or the evidence of Tarun, there remain the uncorroborated testimonies of Sudharani and Narmaya. The rule of prudence demands that it is unsafe to-convict an accused on the uncorroborated testimony of an accomplice or accomplices. But I must tell you, gentlemen, that it is within your legal province to companyvict upon such unconfirmed evidence, provided you can companye to the companyclusion in the particular circumstances of this case that companyroboration can be dispensed with. It will be numbericed that if the learned judge has made any mistake, the mistake is in favour of the accused and. number against him in so far as the learned judge refers to the evidence of the two girl victims as that of accomplices. A girl who is a victim of an outrageous act is, generally speaking, number an accomplice though the rule of prudence requires that the evidence of a prosecutrix should be companyroborated before a companyviction can be based upon it. Hence, the girl Sudharani was number exactly in the position of an accomplice though the judge may, as a rule of prudence, warn the jury that such a rule of prudence required companyroboration of the testimony of the prosecutrix, but that it was open to the jury to companyvict even on the uncorroborated testimony of the prosecutrix if the jury, in the particular circumstances of the case before it, came to the companyclusion that companyroboration was number essential to companyviction. Hence, the learned Sessions Judge was fully justified in telling the jury that there was numberrule of law or practice that there must be companyroboration in every case, before a companyviction for rape. If the jury had been apprised of the necessity, ordinarily speaking, of companyroboration of the evidence of the prosecutrix, it is for the jury to decide whether or number it will companyvict on the uncorroborated testimony of a prosecutrix in the particular circumstances of the case before it. In other words, insistence on companyroboration is advisable but is number companypulsory in the eye of law. In the instant case, apart from the evidence of the two victims aforesaid, there was the evidence of the deaf and dumb girl, Kalyani, and the other circumstantial evidence in support of the prosecution case. It is well established that the nature and extent of companyroboration, necessary, vary with the circumstances of each case. The nature of the companyroborative evidence should be such as to lend assurance that the evidence of the prosecutrix can be safely acted upon. See, in this companynection, the observations of this Court in the case of Rameshwar v. The State of Rajasthan 1 to the following effect The only rule of law is that this rule of prudence must be present to the mind of the judge or the jury as the case may be and be understood and appreciated by him or them. There is numberrule of practice that there must, in every case, be companyroboration before a companyviction can be allowed to stand. Lastly, we do number find anything basically wrong with the direction in the charge to the jury as regards the age of the girl Sudharani and as to the nature of the evidence to prove her age. The learned judge pointed out the several items of evidence which had been adduced by the prosecution bearing on the question of the girls age. The only companyclusive piece of evidence may be the birth certificate, but, unfortunately, in this companyntry such a document is number ordinarily available. The Court or the jury has to base its companyclusions upon all the facts and circumstances disclosed on examining all the physical features of the person whose age is in question, in companyjunction with such oral testimony as may be available. The girls father was dead. Her mother apparently has left her to her own fate, and according to the evidence of the police, the mothers whereabouts were number traceable. It was sought to be argued that the police officer who himself made the inquiry, should have been examined, otherwise, the result of the inquiry is a mere hearsay. An inquiry whether made by one or the other police officer, would, almost in every case, be the result of hearsay. The girl is said to be a displaced person. The difficulty of tracing evidence of the parents of such a person is all the greater. Hence, in all the circumstances of the case, the learned Sessions Judge has number companymitted any error in this part of his charge to the jury. On this part of the case, the learned judge gave the following companycluding directions In criminal trial the accused must get the benefit of doubt and there should number be any companyviction unless it can be clearly and unequivocally said that 1 1952 S.C.R. 386. the age of the girl was below 16. But, gentlemen, in this case you have seen the girls, you have heard the evidence of the experts and you should also take into companysideration the various factors found out in cross-examination and in companysidering all these facts you can arrive at the companyclusion that Sudharani Roy was under 16 years of age on the night of the occurrence on 20th April, 1954, taking into companysideration the facts that ossification test is number a sure guide, even in spite of this, you can companye to the companyclusion that Sudharani Roy was under 16 years of age on the night of the occurrence, i.e., on 20th April, 1954. 1 would tell you, gentlemen, that the question of companysent would be immaterial. In our opinion, the learned Sessions Judge placed the evidence pro and company very fairly and fully, and left it to the jury to companye to their own companyclusion. According to the medical evidence, Sudharani was between 13 to 14 years of age on the relevant date, whereas the other girl in respect of whom, the accused was acquitted, was found by the medical test to be between 15 and 16 years. The jury, therefore, took the companymonsense point of view and appeared to have companye to the companyclusion that Narmaya may well have been above 16, and that, therefore, the accused companyld number be companyvicted for rape on her. In respect of the girl Sudharani, they may have companye to the companyclusion that she was number above 16, and that, therefore, the prosecution had succeeded in bringing the charge home to the accused. We have read the charge of the learned judge to the jury more than once, and, in our opinion, it is a very fair and full charge, erring more on the side of verbosity than of brevity. In our opinion, there is numbermerit in the appeal.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 82 of 1957. Appeal by special leave from the judgment and order dated the 12th August, 1953, of the Allahabad High Court in Criminal Appeal No. 114 of 1951 arising out of the judgment and order dated the 31st July, 1950, of the Court of the Additional Sessions Judge at Allahabad in Criminal Sessions Trial No. 22 of 1949. P. Sinha and B. C. Misra, for the appellant. C. Mathur and C. P. Lal, for the respondent. 1957. October 14. The following Judgment of the Court was delivered by SINHA J.-This appeal by special leave is directed against the judgment and order dated August 12, 1953, of a Division Bench of the Allahabad High Court Desai and Beg JJ. , setting aside the order of acquittal passed by the learned Additional Sessions Judge at Allahabad, dated July 31, 1950, in Sessions Trial No. 22 of 1949. The appellant bad been charged under ss. 408 and 477A of the Indian Penal Code, and tried by jury of 5. The jury returned a unanimous verdict of number guilty. The learned Additional Sessions Judge accepted the verdict of the jury and acquitted the accused. On appeal by the Government of Uttar Pradesh, the High Court in a judgment companyering about 130 typed pages set aside the order of acquittal and companyvicted the appellant under the sections aforesaid, and sentenced him to rigorous imprisonment for four years and a fine of ten thousand rupees, in default of payment, further rigorous imprisonment for one year, under s. 408, Indian Penal Code, and to rigorous imprisonment for four years under s. 477A, Indian Penal Code, the sentences of imprisonment under the two sections to run companysecutively. Out of the fine, if realized, seven thousand rupees was directed to be paid to the Imperial Bank of India, Allahabad, as companypensation. The prayer for a certificate of fitness for appeal to this Court was refused. The appellant moved this Court and obtained special leave to appeal by order dated December 15, 1953. In the view we take of the legality of the trial in this case, it is number necessary to go into the details of the prosecution case except to state that the appellant was charged under the sections aforesaid, for having companymitted criminal breach of trust in respect of valuable securities amounting to Rs. 7,410 odd of the Imperial Bank at Allahabad, while in the employment of the Bank as a clerk, and had in that capacity, with intent to defraud, destroyed, altered, mutilated and falsified accounts and other papers during January to July, 1946. A number of companytentions were raised before us by the learned companynsel for the appellants, but it is necessary to numberice only two of them, namely, 1 that the appeal by the State of Uttar Pradesh, to the High Court, should number have been entertained as the memorandum of appeal did number companyply with the requirements of law as laid down in ss. 418 and 419 of the Code of Criminal Procedure and 2 that the trial in the Sessions Court was numbertrial at all in the eye of law. In respect of the first companytention, it is enough to say that though the memorandum of appeal filed in the High Court was wholly inadequate, the defect was number such as to render it null and void so as to entitle the High Court to reject it in liming. The point arises in this way Apart from the prayer, the only ground taken in the petition of appeal is that the order of acquittal is against the weight of evidence on the record and companytrary to law. The argument is that under s. 418 of the Criminal Procedure Code, where a trial is by jury, the appeal shall lie on a matter of law only , and as numberparticular error of law is set out in the memorandum of appeal, the companysequence of this serious omission, it is further companytended, is that in the eye of law, this was numberpetition of appeal at all, which companyld have been entertained by the High Court. This companytention was raised before the High Court by way of a preliminary objection to the maintainability of the appeal. The High Court overruled that objection on the ground that s. 419 which is the specific provision of the Code of Criminal Procedure, relating to petition of appeal, only requires that it shall be in writing and accompanied by a companyy of the judgment or order appealed against, and in cases tried by jury, a companyy of the heads of the charge recorded under a. 367 of the Code. The High Court observed that there is numberprovision in the Code which required that the petition of appeals should specify the matters of fact or of law, on which the appeal is based. The Court also referred to the prevailing practice in that Court according to which numberspecific grounds are taken either on fact or on law. According to the High Court, there was numberdifference between an appeal based on facts and an appeal based only on questions of law, as in the case of a jury trial. In view of these companysiderations, the High Court held that the preliminary objection was number well-founded in law. Assuming that the High Court was companyrect in its appreciation of the legal position, even so, we must express our disapproval of any such practice as has been referred to in the judgment below. A memorandum of appeal is meant to be a succinct statement of the grounds upon which the appellant proposes to support the appeal. It is a numberice to the Court that such and such specific grounds are proposed to be urged on behalf of the appellant, as also a numberice to the respondent that he should be ready to meet those specific grounds. A memorandum of appeal with a bald ground like the one quoted above is of numberhelp to any of the parties or to the Court. It may have the merit of relieving the person responsible for drawing up the ground of appeal, of applying his mind to the judgment under appeal and its weak points, but this slight advantage, if it is so, is very much out-weighed by the serious disadvantage to the parties to the litigation and the Court which is to hear the appeal. Such a bald statement of the grounds leaves the door wide open for all kinds of submissions, thus, tending to waste the time of the Court, and taking the respondents by surprise. It is a numberorious fact that companyrts, particularly in the part of the companyntry from where this appeal companyes, are over-burdened with large accumu- lations of undisposed of cases. The parties companycerned and their legal advisers should companycentrate and focus their attention on the essential features of cases so as to facilitate speedy, and companysequently, cheap administration of justice. It may be that a bald ground like the one numbericed above, was responsible for the inordinately long judgment of the High Court. Such a practice, if any, deserves to be discontinued and a more efficient way of drawing up grounds of appeal has to be developed. If companynsel for the parties to a litigation companycentrate on the essential features of a case, eliminating all redundancies, the argument becomes more intelligible and helpful to the Court in focussing its attention on the important aspects of the case. As the appeal succeeds on the second ground, as will presently appear, we need number say anything more on the first ground. The second ground on which, in our opinion, the appeal must succeed, is based on the findings of the High Court itself This case involved a companysideration of a large volume of documentary evidence almost all in English. The oral evidence was directed mainly to companynect those documents and to explain their bearing on the charges framed against the accused, of criminal breach of trust and falsification of relevant accounts and entries in the registers maintained by the Bank. Mr. Ganguli, prosecution witness No. 26 -Agent of the Bank-was examined at great length, and be gave his evidence on 12 days between October and December, 1949, It runs into about 45 typed pages. This evidence appears to have been given by him in English because he put in an application that he had given the evidence in English and that he was number in a position to say whether the Hindi version as recorded by the deposition- writer was the companyrect version, as he was number familiar with Hindi. The High Court had made the following observations as to the nature of the case and the requisite qualifications of the members of the jury necessary for a proper under. standing of the case We companysider that the instant case was number fit to be tried by a jury at least by any ordinary jury. It was a very companyplicated case in which a mass of documents was produced. The decision of the case rested upon the question by whom the various documents were written or prepared. Those documents are all in English and numberody companyld decide the case satisfactorily unless he had a good knowledge of English and was in a position to judge the writing. The offences with which the respondent was charged were under a Government order triable by a jury and the case had to be tried by a jury unless the Government thought fit to revoke or alter the order. The Government did number revoke or alter the order and did number even declare that the case should be tried by a special jury under s. 269 2 , Criminal Procedure Code. In our opinion, the remarks of the High Court quoted above give a companyrect impression of the proceedings in the Court of Session. It further appears from the judgment of the High Court that the learned Advocate General who argued the case in support of the appeal on behalf of the State, urged that the jurors were number equal to the task involved in a proper determination of the companytroversy. The High Court directed the trial companyrt to hold an inquiry and report on this aspect of the case. On a companysideration of the report submitted by that companyrt, the High Court recorded its finding to the following effect Out of the five jurors selected by the learned Sessions Judge, three had sufficient knowledge of English, fourth knew very little English and companyld number read the documents produced in the case and the fifth also had number sufficient knowledge of English he companyld understand a letter written in English with some difficulty and companyld number read English newspapers. This is what we find from a report made by the learned Sessions Judge after summoning the jurors and examining them on a letter issued by us. We are satisfied that the two jurors, Shri Sheik Ashique Ali and Shri Farman Ali, were number in a position to decide the question of authorship of the forged documents satisfactorily. It was number merely a question of under- standing the companytents of the documents produced in the case the jurors also had to decide whether they were written or signed by the respondent as deposed by the prosecution witnesses or number. They did number possess sufficient acquaintance with English to decide that question satisfactorily. On that finding, it is clear that the appellants companytention that it was a trial companyam number judice is well-founded. This case is analogous to the case of Ras Behari Lal v. The King Emperor 1 , which went up to the Judicial Committee of the Privy Council, from a judgment of the Patna High Court companyfirming the companyviction and the sentences of the accused persons on a charge of murder and rioting. In that case, the trial was by a jury of 7. The jury by a majority of six to one found the accused guilty. The learned trial judge accepted the verdict and sentenced some of the accused persons to death. The High Court overruled the accused persons companytentions that there was numberlegal trial because some of the jury did number know sufficient English to follow the proceedings in Court. The Judicial Committee granted special leave to appeal on a report made by the High Court that one of the jurors did number know sufficient English to follow the proceedings in Court. Before the Judicial Committee, it was companyceded, and in their Lordships view, rightly, by companynsel for the prosecution that the appellants had number been tried, and that, therefore, the companyvictions and sentences companyld number stand. Lord Atkin, who delivered the judgment of the Judicial Committee, made the following- 1 1933 L.R. 60 I.A. 354, 357. observations upon the companycession made by companynsel for the respondent In their Lordships opinion, this is necessarily the companyrect view. They think that the effect of the incompetence of a juror is to deny to the accused an essential part of the protection accorded to him by law and that the result of the trial in the present case was a clear miscarriage of justice. They have numberdoubt that in those circumstances the companyviction and sentence should number be allowed to stand. In our opinion, the legal position in the instant case is the same. It was., however, argued on behalf of the State Government that in the instant case, the jury had returned a unanimous verdict of number guilty and that, therefore, there was numberprejudice to the accused persons. It is true that the incompetence of the jury empanelled in this case was raised by the companynsel for the State Government in the High Court but in view of the findings arrived at by the High Court, as quoted above, the position is clear in law that irrespective of the result, it was numbertrial at all The question of prejudice does number arise because it is number a mere irregularity. but a case of mis-trial, as the Judicial Committee put it. It is unfortunate that a prosecution which has been pending so long in respect of an offence which is said to have been companymitted about eleven years ago, should end like this but it will be open to the State Government, if it is so advised, to take steps for a retrial, as was directed by the Judicial Committee in the reported case referred to above. The appeal is, accordingly, allowed and the companyvictions and the sentences are set aside. We do number express any opinion on the question whether it is a fit case for a de numbero trial by a companypetent jury or by a Court of Session without a jury, if the present state of the law permits it.

Case appeal was accepted by the Supreme Court

CIVIL APPFLLATE JURISDICTION Civil Appeal No. 330 of 1956. Appeal by special leave from the Judgment and decree dated September 5, 1955, of the Rajasthan High Court in Writ Petition No. 76 of 1954. V. Viswanatha Sastri and Ratnaparkhi A. G., for the appellant. Ganapathy Iyer, Ram Avtar Gupta and T. M. Sen, for the respondent. 1957. November 28. The following Judgment of the Court was delivered by BOSE J.-This appeal arises out of a writ petition for mandamus under Art. 226 of the Constitution. The appellant was a District and Sessions Judge in the former Bikaner State. He was appointed on January 29, 1948, in the grade of Rs. 500-40-700 and worked as such till April 7, 1949. On that date a new State of Rajasthan was formed by the integration of a number of States including the former State of Bikaner by means of a Covenant signed by the High Contracting Parties. Article XVI 1 of the Covenant ran thus The United State hereby guarantees either the companytinuance in service of the permanent members of 1015 the public services of the former Rajasthan State and of each of the new Covenanting States on companyditions which will number be less advantageous than those on which they were serving on the 1st November 1948 or the payment of reasonable companypensation or retirement on proportionate pension. The integration necessarily involved a reorganisation of the various services in the several integrating States. On the judicial side it was found that there were as many as twenty eight Courts of District and Sessions Judges in the aggregate. In the integrated State it was proposed to have only fifteen. The reorganisation took time and in the interval certain interim arrangements had to be made. These arrangements are set out in a Rajasthan Gazette Notification dated May 25, 1950. We append the relevant extracts In Appendix F have been indicated the provisional postings on an ad hoc basis of the posts specified in Appendices A to E. All the appointments mentioned in the different Appendices, attached to this Order, are provisional. The emoluments of numbere of these officers appointed are being affected and they will companytinue to draw their existing salaries until further orders. All the appointments are without prejudice to the creation of a Judicial Service in Rajasthan to be formed in accordance with the rules which may be made therefor. Appendix F is headed- Ad hoc postings of Judicial Officers to Civil and Sessions Courts. The appellant was appointed under this beading in Part 11 as a Civil and Additional Sessions Judge in the Jaipur Division. But before this Notification was made, namely, on December 9, 1949, the appellant received the following order from the new Rajasthan Government Shri Amar Singh, District and Sessions Judge, Churu, is transferred to Ganganagar as District and Sessions Judge, Ganganagar. 1016 Among other companytentions, the appellant relies on this as an election by the new Government to companytinue him in his original post and companytends that it companyld number later change its mind and make his service provisional as it purported to do in the numberification just cited. Two months after the numberification, namely on July 31, 1950, the appellants increment became due and Government sanctioned it in the following terms Sanction is accorded to the grant of a stipulated increment of Rs. 40 p.m. in the scale of Rs. 500-40-700 to Shri Rajvi Amarsingh, District and Sessions Judge in Bikaner Division, with effect from the 23rd March, 1950, thereby raising his salary from Rs. 540 to Rs. 580 p.m. When the final re-organisation was brought into force and the twenty eight Courts of District and Sessions Judges reduced to fifteen, the appellant was posted as Civil and Additional Sessions Judge on an ad hoc basis on May 25, 1950. On September 11, 1950, the appellant made a representation to the Government of Rajasthan against his posting of May 25, 1950, as an ad, hoc Civil and Additional Sessions Judge. He says in his writ petition to the High Court that he was given to understand that these ad hoc postings were without prejudice to the claims of the Government servants for a suitable position in the integrated set up on permanent basis. This allegation was admitted by the opposite party. Later, he was appointed substantively as Civil Judge on April 23, 1951. He was placed in Group C Civil Judges and Munsiffs and placed at No. 18 in the list of junior posts. His pay and emoluments were as before and he retained the same grading, namely Rs. 500-40-700. His earned increments were number affected and, except for the change in name, his companyditions of service were number worse than when he was in the service of the Bikaner State. We were given the last two facts by his companynsel. They do number appear in the paper book. All that is to be found there are 1017 references to these orders but the orders themselves have number been included. Being aggrieved by this, the appellant filed the writ petition out of which this appeal arises on April 3, 1954. His companytention was that under the guarantee given by the United State of Rajasthan, and also otherwise, he was entitled to be posted as a District and Sessions Judge in the new set up and that the posting of April 23, 1951, reduced him in rank. As that was done without affording him an opportunity to show cause, Art. 311 of the Constitution was violated. The High Court held that the posting of April 23, 1951, which purports to appoint the appellant substantively as a Civil Judge, is wrong and that it must be treated as an ad hoc appointment till proper appointments are made to the Judicial Service of Rajasthan according to the Constitution of India. The learned Judges held that as there had been a clear declaration that a new Judicial Service was to be created in Rajasthan and that the existing officers from the various companyenanting States were number to be taken into it as a matter of companyrse, it followed that all appointments to it would be by way of fresh recruitment, and, as the Constitution of India was in force at that date, these recruitments must companyform to its provisions. It was admitted before the learned Judges that after the Constitution only the Rajpramukh had power to make rules regulating the recruitment and companyditions of service of those appointed to public services and posts in companynection with the affairs of the State until provision in that behalf is made by an Act of the Legislature, and it was also admitted that the State Public Service Commission must be companysulted. As this was number done, the learned Judges directed as follows The petition is allowed, the postings made by numberification dated the 23rd April, 1951, including that of the petitioner as Civil Judge, are declared to be on an ad hoc basis, and a direction is made to the Government to provide a machinery according to the 1018 provisions of the Constitution for the first recruitment to the Rajasthan Judicial Service. The judgment was delivered on September 5, 1955, and the appellant thereupon came here and was granted special leave to appeal on April 16, 1956. In the meanwhile, according to the facts set out in the respondents statement of the case, the Rajasthan Government companyplied with the orders of the High Court, reframed their rules and made fresh appointments in accordance with them. These were duly published in the Rajasthan Gazette and the appellant was finally selected to the Rajasthan Judicial Service. He was appointed a Civil Judge. The Appellants companytention is that the order of April 23, 1951, reduced him in rank and as he was number afforded an opportunity of showing cause, Art. 311 of the Constitution was violated. If this companytention is sound, it will follow that the fresh appointment as Civil Judge after the High Courts order will also be bad for the same reasons. Now it is well established that when one State is absorbed in another, whether by accession, companyquest, merger or integration, all companytracts of service between the prior Government and its servants automatically terminate and thereafter those who elect to serve in the new State, and are taken on by it, serve on such terms and companyditions as the new State may choose to impose. This is numberhing more, though on a more exalted scale , than an application of the principle that underlies the law of Master and Servant when there is a change of masters. So far as this Court is companycerned, the law is settled by the decision in The, State of Madras v. K. M. Rajagopalan 1 , which follows the decisions of the Privy Council and the House of Lords in Reilly v. The King 2 , and Nokes v. Doncaster Amalgamated Collieries Ltd. 3 . The distinction between rights to property and companytractual rights when there is a change of sovereignty was pointed out in Virendra Singh others v. The State of Uttar Pradesh 4 . 1 1955 2 S.C.R. 541, 562. 2 1934 A.C. 176. 3 1940 A.C. 1014. 4 1955 1 S.C.R. 415, 427. 1019 The appellant founds on Art. XVI 1 of the Covenant. It was companytended that he cannot rely on this because he was number a party to it but we need number decide this because, even if this be assumed to be the law of the new State settling the companyditions of service of those who companytinue in service, all that it says is that the companyditions of their service will number be less advantageous than those on which they were serving on November 1, 1948. We have shown above that this companydition is fulfilled. But that apart, Article XVI 1 indicates that the old companytracts terminate just as they did in The State Of Madras K. M. Rajagopalan 1 . In the first place, there were three options 1 companytinuance in service, 2 payment of reasonable companypensation, and 3 retirement on proportionate pension. That shows that the old companytracts terminated and that those who companytinued in service did so on the basis of fresh companytracts, the companyditions of which had yet to be determined. The only guarantee assuming that the appellant can avail himself of it was that the new companyditions were number to be less advantageous than those on which the appellant was serving on November 1, 1948. There was numberguarantee that they would be the same or better. This was emphasised in the Rajasthan Gazette Extraordinary dated June 4, 1949. It first referred to the broad outlines of the programme of integration that had already been published and then outlined the procedure and principles to be observed in carrying it out. Paragraph 6 is as follows After final orders have been passed by the Government on the Departmental re-organisation schemes and cadres and strength for different kinds of establishments in each department are fixed, the heads of departments will prepare gradation lists according to prescribed rules and put up proposals for fixation of each individual Government servant in the posts on permanent, officiating or deputation basis. 1 1955 2 S.C.R. 541, 562. 1020 They will also determine the revised rates of pay admissible to each, Gazetted and number-Gazetted officer under the new scales etc. and then paragraph 15- It is number the intention of Government to throw any Government servant out of employ as far as .practicable. If necessary, services of efficient and deserving staff will be retained temporarily on supernumerary basis in the prospect of finding work for them in companynection with new development schemes. The order of December 9,1949, on which the appellant relies, transferring him as District and Sessions Judge to the District Court at Ganganagar, must be read subject to the above and, if Article XVI 1 of the Covenant applies, then subject to that as well. An order of transfer cannot be equated to an order of appointment and in any case, the new cadres had number been established and the new Courts under the proposed scheme of re-organisation had number been companystituted, so, anything done at that stage companyld only have been part and parcel of the temporary transitional arrangements pending the final settlement by the new State of the schemes and companyditions of service. The next set of orders published in the Gazette of May 25, 1950, brings this out clearly. We have already set out its terms. The orders of March 25, 1950, and July 31, 1950, sanctioning the increment do number help the appellant. He is described there as Shri Rajvi Amarsingh, District and Sessions Judge in Bikaner Division. This is merely descriptive as the endorsement on the letter indicates. It runs- Copy forwarded to- Shri Amarsingh, Civil and Addl. Sessions Judge, Jhunjhunu. No determination to post the appellant permanently in a particular cadre and post can be spelled out of these accidental descriptions in orders dealing with a different matter. Postings to a cadre and engagements of service are number made in this incidental way. 1021 The substantive appointment gazetted on April 23, 1951, after the new cadres and Courts had been fixed, was struck down by the High Court, and the Government of Rajasthan was directed to treat that as an ad hoc appointment. According to the respondent in its statement of the case, the matter was regularised after the High Courts decision and the appellant was again appointed a Civil Judge. If that is so, then this must be regarded as his first substantive appointment in the new State. But whether this is his first substantive appointment after the integration, or the one of April 23, 1951, numberquestion of reduction in rank can arise and so Art. 311 is number attracted. All his previous postings in the new State were purely transitional and temporary and so far as Art. XVI 1 of the Covenant is companycerned, its guarantee has been fulfilled.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 158 of 1953. Appeal by special leave from the judgment and decree dated April 6, 1950, of the Calcutta High Court in appeal from original decree No. 166 of 1944 arising out of the decree dated June 30, 1943, of the Court of the Subordinate Judge, Asansol, in Title Suit No. 2 of 1942. Ramanugrah Prasad and Mohan Beharilal, for the appellants. J. Umrigar and S. P. Varma, for respondents Nos. I and 2. 1957. January 29. The Judgment of the Court was delivered by K. DAS J.-This is an appeal by special leave from the judgment and decree of the High Court of Calcutta, dated April 6, 1950, by which the said High Court affirmed the judgment and decree of the Subordinate Judge of Asansol dated June 30, 1943, in Title Suit No. 2 of 1942. The suit was instituted by the four sons of one Ram Kishori Lal Sao, a resident of Asansol in Bengal, who died in September 1927. One of the plaintiffs, Kalicharan, died during the pendency of the suit and his heirs were brought on the record as plaintiffs in his stead. The defendants were Sumitra Devi, widow of the late Ram Kishori Lal, defendant No. 1 and Kamala Devi, daughter of the late Ram Kishori Lal defendant -No. 2 . The said defendants, I and 2, are the appellants before us. The suit was instituted for a declaration that a deed of gift dated March 10, 1940, executed by Sumitra Devi in favour of her daughter Kamala Devi, was void and inoperative beyond the lifetime of Sumitra Devi and was number binding on the reversion. The following genealogical table shows the -relation inter se, between the parties Ram Kishori Lal 3rd wife 4th wife 5th wife Sumitra Devi Deft. 1 Kalicharan Plff.3 Rambandhu BachuLal Heman Lal died during pen plff. 4 Plff. 1 Plff. 2 dency of the suit- Mst. Ram Sakhi Plff. 3 gha Satyanarain HiralalGopal Lachmi Narain Kamala Devi Plff. 3 Ka Plff. 3 Kha Plff- 3 Ga died on I -I-36 Deft. 2 On his death, Ram Kishori Lal had left extensive properties worth several lakhs, including some houses in Asansol, two businesses at Howrah and Asansol, and large amounts of money deposited in Banks or invested in loans etc. Shortly after his death Sumitra Devi, for herself and as guardian of her two children, Lachmi Narain and Kamala, brought a suit against her step. sons for partition of the properties left by her husband. This suit was registered as Title Suit No. 664 of 1927 in the Court of the Subordinate Judge of Asansol. A preliminary decree was passed in the suit on July 22, 1933, and a final decree on June 29, 1936. This decree provided for payment of Rs. 10,000 as expenses for the marriage of the minor daughter Kamala, in addition to a maintenance allowance of Rs. 50 per month to her until she was married. Lachmi Narain, it should be numbered, died on January 1, 1936. By the final decree each of the sons obtained one-sixth share of the estate of Ram Kishori Lal. By reason of the death of Lachmi Narain before the final decree, Sumitra Devi got one-third share of the estate, one- sixth in her capacity as widow and one-sixth as the mother of her pre-deceased son. The allotment in favour of Sumitra Devi companysisted mostly of house properties, and the four houses of her share with which we are companycerned in this litigation were described in a schedule to the plaint and stood on Municipal Holding Nos. 116, 17, 26 and 27 of Circle 4 of the Asansol Municipality. The value of these four houses was found by the Commissioner at the time of partition to be in the neighbourhood of Rs. 19,000 only. The marriage of Kamala Devi was settled with one Bijoy Kumar Sao, son of Nand Lal Sao, a retired Deputy Postmaster, Patna General Post Office. The case of the appellants was that the marriage was settled at Deoghar on Shivratri day in 1938 and the plaintiffs, respondents before us, had numberconcern with the negotiation it was alleged that the terms of the marriage settlement included a promise by Sumitra Devi of a gift of four houses at Asansol, worth about Rs. 20,000 as marriage dowry for Kamala. The further case of the appellants was that at the time of the marriage itself, which was performed on May 10, 1938, Sumitra Devi made a sankalpa of the gift of four houses at Asansol, which was accepted by Nand Lal Sao on behalf of Kamala, and the gift was later companyfirmed on the occasion of the Dwiragaman Gowna ceremony which took place in December, 1938, and possession of the houses was also given to her soon after the marriage, however, Sumitra Devi feel ill and the deed of gift was actually executed and registered on March 10, 1940, some two years after the marriage. This was the deed of gift which was impugned by the plaintiffs-respondents. The case of the plaintiffs-respondents was that the marriage negotiations took place at Asansol and did number companytain any promise of the gift of four houses as marriage dowry. The plaintiffs-respondents alleged that the arrangements were that ornaments worth about Rs. 5,000 were to be given to Kamala Devi, a sum of Rs. 800 was to be paid as travelling expenses of the bridegrooms party, and gifts of some moveable properties were to be made out of the balance of the sum of Rs. 10,000 which was set apart for the marriage expenses of Kamala Devi. The plaintiffs-respondents denied that there was any ante-nuptial promise of a gift of four houses as marriage dowry or that there was any sankalpa at the time of marriage or any companyfirmation of the gift at the Dwiragaman ceremony. They alleged that Sumitra Devi, under the evil advice of her father and son-in-law -and to deprive the plaintiffs-respondents of their right, made a gift of the four houses at Asansol in favour of Kamala Devi on the 10th March, 1940, a gift which she was number companypetent under the law to make. It was alleged that the gift was companylusive, fraudulent and without companysideration and in any event, it companyld number be operative beyond the lifetime of Sumitra Devi and was number binding on the reversion, as she had only a life interest in the companypus of the property and there was numberjustifying legal necessity for the alienation made by her. It wag also alleged that Sumitra Devi was number legally companypetent to make a gift, as marriage dowry of her daughter, of such a big and unreasonable portion of the estate left by her husband. On the aforesaid pleadings of the parties, the principal issues were Issues Nos. 2 and 3 which were in these terms Is the defendant No. I companypetent to make any gift of the properties mentioned in the plaint beyond her lifetime to defendant No. 2 ? Is it void and inoperative against the plaintiffs beyond the lifetime of defendant No. I ? Is the deed of gift executed by defendant No. I in favour of defendant No. 2 with the alleged companylusive and fraudulent allegations binding on the plaintiffs on her death ? It is necessary number to summarise the findings of the Courts below on these issues. On the questions of fact involved in the two issues, the learned Subordinate Judge came to the following findings 1 the marriage of Kamala Devi was settled at Deoghar as claimed by Mst. Sumitra Devi and number At Asansol 2 there was, however, numberpromise of any gift by her of four houses at Asansol either at the time of the settlement of the marriage terms at Deoghar or during the marriage ceremony 3 the story of the delivery of possession of the houses to Kamala Devi was number supported by reliable evidence. Basing his decision on the aforesaid findings of fact, the learned Subordinate Judge held that the interest created in favour of Sumitra Devi in respect of the properties allotted to her on partition was in the nature of an ordinary maintenance grant and she had numberright to alienate the same in favour of her daughter. Even if she had the limited right of disposal, as in the case of a Hindu widow, she was number companypetent to execute any deed of gift, except with regard to a reasonable portion of the estate of her husband at the time of the marriage of Kamala Devi or on the occasion of the Gowna ceremony. Though the learned Subordinate Judge found that the properties given to Kamala Devi companystituted a reasonable portion of the estate, he held that the gift number having been made at the time of the marriage or on the occasion of the Gowna ceremony in accordance with the provi- sions of s. 123, Transfer of Property Act, was number binding on the plaintiffs-respondents and companyld number operate beyond the lifetime of Sumitra Devi. He accordingly decreed the suit. The learned Judges of the High Court formulated five questions of fact, four of which are important for our purpose, and on a fresh companysideration of the evidence on the record, came to the following findings thereon 1 a final settlement of the terms of marriage was made at Deoghar and the terms which were settled between the parties were a that Sumitra Devi would arrange for the gift of ornaments worth about Rs. 5,000, b a sum of Rs. 800 would be paid for meeting the expenses of travelling of the bridegrooms party from Patna to Asansol, e a sum of Rs. 51 would be paid for the Tilak ceremony and d a gift of four houses at Asansol, worth about Rs. 20,000, would be made in favour of Kamala Devi, though the evidence led on behalf of the appellants did number make it absolutely clear or specific that the promise related to the four particular houses which were the subjectmatter of the subsequent gift 2 the plaintiffs-respondents had numberhing to do either with the settlement of the terms of marriage or with any companytrol or management of the marriage ceremony 3 there was numberreliable evidence that Sumitra Devi had made a sankalpa of the gift of the houses when the bride was given in marriage and the question of companyfirming such a gift at the Gowna ceremony did number therefore arise 4 it was number proved by reliable evidence that the possession of the houses in question, was made over to Kamala Devi before the actual execution of the deed of gift. Relying on the decision in Debi Mangal Prasad Singh v. Mahadeo Prasad Singh 1 , the learned Judges of the High Court pointed out that even in cases governed by the Mitakshara the parties in this case are admittedly governed by the Benares school of Mitakshara law the share allotted to Sumitra Devi on partition was number her stridhan but stood on the same footing as property inherited by her from her husband and that on her death the property would pass number to her stridhan heirs but to the sons or grandsons. The learned Judges then referred to the decision in Churaman Sahu v. Go pi Sahu 2 and observed that though it was companypetent for a Hindu widow, governed by the Mitakshara, to make a valid gift of a reasonable portion of the immoveable property of her husband to her daughter subsequent to the marriage ceremony, the gift in Churaman Sahus case was made at the time of the Dwiragaman Gowna ceremony which was really a part of the marriage ceremony, while the -gift in the present case was made some two years after the marriage. They then said In the case number before us the marriage and the Gowna ceremony took place in 1938 and the document was executed in March 1940, the lapse of time between the two is too great to describe the gift to have been made on the occasion of either the marriage or the Gowna ceremony. No authority had been placed before us supporting a gift by a widow to a daughter except at the time or on the occasion of marriage ceremony. The ante-nuptial promise cannot be regarded as a gift having been made on the occasion of the marriage. Had it number been for the provisions companytained in the Transfer of Property Act governing the Law of Gifts it might have been possible to companysider the gift as having been made on the occasion of the marriage, the implementation of which was subsequent. In view of the strict provisions of the Transfer of Property Act we can only companysider the gift to have been made at the time when the deed was executed and registered. On the question whether the gift in favour of Kamala Devi by Sumitra Devi I 1912 L.R. 39 I.A. 121. 2 1909 I.L.R. 37 Cal. 1. was of a reasonable portion of her husbands properties, the learned Judges observed In the present case, the value of the houses gifted was just above Rs. 18,000 which was about a fourth of the value of each share allotted viz., above Rs. 73,000 . Even if the provision of Rs. 10,000 made in the partition decree for meeting the marriage expenses be taken into account, we cannot say that the value of the gifted houses was disproportionate or unreasonable. In the result, the High Court affirmed the decision of the learned Subordinate Judge and dismissed the appeal preferred by the defendants who are the appellants here. It is necessary to state number the companytentions which have been urged before us on behalf of the appellants, and they may be put in two main categories- a companytentions with regard to the findings of fact, and b companytentions of law. Learned companynsel for the appellants has impeached the companycurrent finding of the Courts below that there was numbersankalpa or promise of a gift of the four houses in question at the time of the marriage ceremony which, it was alleged, was followed by a companyfirmation of the gift at the Gowna ceremony. The finding has been impeached on the ground of a serious error of record said to have been companymitted by the High Court and on the ground of number-consideration of relevant evidence. It has been argued before us that the proper finding should have been that Sumitra Devi made a sankalpa of the gift of the four houses in question after the Sampradan ceremony on the occasion of the marriage of Kamala Devi and that the gift was accepted by Nand Lal on behalf of his minor daughter-in-law and that such a gift was again companyfirmed at the Gowna ceremony. The main companytentions of law are three in number firstly, it has been companytended that even accepting the findings of the final Court of fact as companyrect, the gift being of a reasonable portion of the estate of Ram Kishori Lal Sao and in pursuance and fulfilment of an ante-nuptial agreement made by Sumitra Devi at the time of the final settlement of the marriage negotiations at Deoghar, was for the spiritual benefit of Ram Kishori Lal and valid in Hindu law any such lapse of time as occurred in the execution and registration of the deed of gift was immaterial, if the deed of gift was in fulfilment of the moral obligation flowing from the ante- nuptial agreement secondly, it was suggested that Sumitra Devi got an absolute right in the properties given to her as her share on partition thirdly, a reference was made to section 14 of the Hindu Succession Act, 1956 and it has been argued that in view of the said provisions the plaintiffs- respondents were number entitled to the reliefs which they claimed. It may be stated here that arguments in the case had companycluded before the Court closed for the annual vacation in 1956 and during the vacation the Hindu Succession Act, 1956, came into force on June 17, 1956. On an application filed by the appellants, fresh arguments were heard with regard to the provisions of s. 14 of the Hindu Succession Act, 1956. We proceed number to deal with the companytentions in the order in which we have stated them. First, we take up the companytentions with regard to the findings of fact referred to above. It has been pointed out to us that the learned Judges of the High Court made a serious error of record in dealing with the oral evidence as to the verbal gift said to have been made at the time of the marriage of Kamala Devi and the acceptance of ,such a gift by Nand Lal, father-in- law of Kamala Devi. In dealing with the oral evidence on this question, the learned Judges have said If we leave out of account for the present the evidence of Sumitra Devi and Bijoy as also of Kamal, who has been companytradicted on a very material point by the other witnesses and also Nand Lal, father of Bijoy, we are left with Parasuram and Rash Behary. Parasuram, a tenant, happens to be present at the psychological moment only for a few minutes when the Sankalpa is being made. The High Court clearly made a mistake in dealing with the evidence of Parasuram Sharma and companyfused Parasuram Sharma witness No. 16 with Pashupati Sarkar witness No. 10 . Pashupathi Sarkar was a tenant of Sumitra Devi and it was his evidence that he went to the place of marriage at about 12 midnight or 1 a.m. and stayed there for two minutes only and then came away. Parasuram Sharma witness No. 16 was number a tenant of Sumitra Devi. He was the Head Master of the Indian H.E. School at Patna, a school where Bijoy, husband of Kamala, was a pupil for two years. This Head Master said that he attended the marriage as a member of the bridegrooms party and was present when from behind the purdah Sumitra Devi made a sankalpa of the gift of four houses this was company- veyed by Ganapati Sastri who recited mantras and was accepted by Nand Lal. It is unfortunate that the High Court companyfused Parasuram Sharma witness No. 16 with Pashupati Sarkar witness No. 10 , with the result that Parasuram Sharmas evidence was number properly companysidered by the High Court. This defect in the companysideration of the evidence by the High Court is undoubtedly there. The point for companysideration is if this is a Sufficient ground for departure from the ordinary rule of this Court number to go behind the findings of fact arrived at by the Courts below. Though the mistake made is unfortunate, we do number think that it is sufficient to disturb the finding of the Courts below or even to re-open the finding at this stage. It is worthy of numbere that the learned Subordinate Judge made numbermistake about Pashupati and Parasuram. He pointed out that the witnesses examined on behalf of the appellants with regard to the verbal gift at the time of the marriage and its acceptance by Nand Lal, were mostly interested witnesses and numbere of them were really independent. Even Parasuram Sharma, whose evidence has been placed before us by learned companynsel for the appellants, cannot be said to be companypletely independent. He was invited to attend the marriage as a member of the bridegrooms party and he said that he Overheard Sumitra Devi saying that she was making a sankalpa of the gift of four houses as promised evidence which is number of a very satisfactory nature. There were many other criticisms of the evidence regarding the verbal gift at the time of the marriage the learned Judges of the High Court have referred to these criticisms and they accepted some of them, One of the criticisms which greatly weighed with the learned Subordinate Judge was the absence of any reference to the gift of four houses in companytemporaneous Court proceedings with regard to the withdrawal of Rs. 10,000 by Sumitra Devi, the sum which was set apart by the partition decree for the marriage expenses of Kamala Devi. This criticism was number, however, fully accepted by the learned Judges of the High Court who placed greater reliance on the evidence of Rai Saheb Jogendra Nath Roy witness No. 14 who was the most respectable and reliable witness examined on behalf of the appellants. The evidence of this- witness supported the evidence of Sumitra Devi with regard to the promise made regarding the gift of four Asansol houses at the time of the settlement of marriage negotiations at Deoghar. There can be numberdoubt that Rai Saheb Jogendra Nath Roy was a very respectable witness and had numberreasons to tell lies. Though he supported that part of the evidence of Sumitra Devi which related to the promise of a gift of four houses at Asansol at the time of the marriage negotiations at Deoghar, he made numberstatement about a verbal gift having been made at the time of the marriage itself. The witness said that he went to Sumitra Devis house on the evening of the marriage and stayed for fifteen to twenty-five minutes only. He further said that he was number present at the time of the marriage ceremony. It may, therefore, be that Rai Saheb Jogendra Nath Roy was number present at the time when the verbal gift was alleged to have been made. By far and large, the learned Judges of the High Court did examine with care the oral evidence with regard to the alleged verbal gift at the time of the marriage and but for the unfortunate companyfusion between Parasuram Sharma and Pashupati Sarkar, we do number think that the companysiderstion of the oral evidence by the High Court is open to any other serious criticism. The learned Judges rightly pointed out a serious discrepancy which existed between the evidence of Kamal Narayan Pandey witness No. 8 , who is said to have acted as the priest for the marriage, and the evidence of other witnesses with regard to the lagan or time 6o of marriage. Taking all these circumstances into company- sideration, we do number think that we shall be justified in going behind the finding of the Courts below that la the appellants had failed to prove by satisfactory evidence that Mst. Sumitra Devi made a verbal gift of the four houses in question at the time of the marriage of her daughter Kamala Devi and that such a gift was accepted by Nand Lal on behalf of his minor daughterin-law. In view of this finding, the question as to whether the gift was again companyfirmed at the time of the Gowna ceremony does number really arise. There can be numberconfirmation of an act which did number itself take place. As the appellants have impeached the finding of the Courts below with regard to the verbal gift said to have been made at the time of the marriage, the respondents have also impeached before us the finding of the High Court about an ante-nuptial agreement said to have been made at Deoghar. It has been companytended by learned companynsel for the respondents that there were numbercompelling reasons for the High Court, which was the appellate Court, to differ from the appreciation of the oral evidence by the learned Subordinate Judge, who had the advantage of seeing the witnesses, with regard to the question of the ante-nuptial agreement said to have been made at Deoghar. It is true that the learned Subordinate Judge did number accept the evidence of the witnesses who testified to the terms of settlement of the marriage negotiations at Deoghar. What tipped the scale in favour of the finding arrived at by the High Court on this point was the evidence of Rai Sahib Jogendra Nath Roy witness No. 14 . The learned Subordinate Judge gave certain reasons for number accepting the evidence of this witness. The learned Judges of the High Court companysidered those reasons very carefully and rightly pointed out that there were numbergood grounds for thinking that Rai Saheb Jogendra Nath Roy had fallen a victim to lapse of memory or for holding that he was an interested witness. The evidence of Rai Sabeb Jogendra Nath Roy was companysidered in the companytext of companytemporaneous Court proceedings for the withdrawal of Rs. 10,000 and the learned Judges of the High Court accepted the explanation which Rai Saheb Jogendra Nath Roy gave for number mentioning the promise of a gift of four houses in Asansol in the application which Sumitra Devi made for the withdrawal of the said sum of Rs. 10,000. In our opinion, the finding of the High Court as to an ante-nuptial agreement for the gift of four houses at Asansol, worth about Rs. 20,000, is number vitiated by any error of fact or law. That finding must, therefore, be accepted as a companyrect finding, even though the learned Subordinate Judge came to a companytrary companyclusion with regard to it. Having disposed of the -contentions of fact urged before us, we proceed number to a companysideration of the companytentions of law. It may be companyvenient to dispose of, first, the argument somewhat faintly advanced on behalf of the appellants that even prior to the enactment of the Hindu Succession Act, 1956, Sumitra Devi had an absolute right of disposal in the share allotted to her on partition in 1933-36 under Mitakshara law. The question whether the share allotted to a mother on partition is stridhan or number, according to the Benares school, was left open by their Lordships of the Privy Council in Bhugwandeen Doobey v. Myna Baee 1 , the very case in which they held that property inherited by a woman was number stridhan according to the Mitakshara. In Debi Mangal Prasad Singh v. Mahadeo Prasad Singh 2 , the Allahabad High Court, after a review of all the authorities on the subject, held that it was stridhan but the Privy Council held that it stood on the same footing as property inherited by a woman and that it was number stridhan. The actual point decided in Debi Mangal Prasads case was that there was numbersubstantial difference in principle between a womans property acquired by inheritance and that acquired by partition. It is worthy of numbere that the partition decree proceeded on the footing that Sumitra Devi would be entitled to the income from the properties allotted to her but should number be in a position to prejudice the reversioners by destroying the companypus. The preliminary decree for partition stated The Commissioner is further directed to allot as little liquid 1 1863 M.I.A.487,514. 2 1912 L. R. 39 I.A. 121. cash to the share of plaintiff No. 2 Sumitra Devi as possible on partition and as a rule should allot such properties to her share of which she may receive income without trouble, but may number prejudice the reversioners by destroying the companypus . It follows, therefore, that under the Mitakshara law and also under the partition decree, Mst. Sumitra Devi did number have an absolute right or interest in the share allotted to her on partition. Under the decision in Debi Mangal Prasad Singh v. Mahadeo Prasad Singh 1 , the property allotted to Mst. Sumitra Devi on partition stood on the same footing as property inherited by her from her husband. She had numberabsolute right of disposal of the property. This brings us to a companysideration of the principal point argued before us on behalf of the appellants, namely, whether Sumitra Devi was companypetent to make a gift of a reasonable portion of the estate of her husband to her daughter Kamala, Devi as a marriage dowry in pursuance and fulfilment of an ante-nuptial agreement, even though the gift was made some two years after the marriage ceremony. This point was urged before us, as we have already stated, prior to and irrespective of the enactment of the Hindu Succession Act, 1956. The argument of learned companynsel for the appellants was that Sumitra Devi was companypetent to make such a gift under the Hindu law, even as it stood prior to the enactment of the Hindu Succession Act, 1956. We shall, therefore, deal with this point, irrespective of the provisions of s. 14 of the Hindu Succession Act, 1956. It may be stated at the very outset that the companycurrent finding of the Courts below was that the gift of four houses at Asansol, of a value of about Rs. 19,000, was number disproportionate or unreasonable if one had regard to the large extent of properties left by Rain Kishori Lal Sao on his death this was so even taking into companysideration the sum of Rs. 10,000 which was set apart for the marriage expenses of Kamala Devi and which was withdrawn by Sumitra Devi. In our opinion, that finding is companyrect and must be accepted as such. Therefore, the narrow question is if Sumitra Devi,was companypetent to make the gift of four houses at 1 1912 L.R. 39 I.A. 121. Asansol as marriage dowry to her daughter, some two years after the marriage, in pursuance and fulfilment of the ante- nuptial agreement made at Deoghar. There are a number of decisions bearing on the question, to which our attention has been drawn by learned companynsel for the parties, and we propose number to examine some of them. In Sardar Singh v. Kunj Behari Lal 1 it was observed There can be numberdoubt upon a review of the Hindu law, taken in companyjunction with the decided cases, that the Hindu system recognises two sets of religious acts. One is in companynection with the actual obsequies of the deceased, and the periodical performance of the obsequial rites prescribed in the Hindu religious law, which are companysidered as essential for the salvation of the soul of the deceased. The other relates to acts which although number essential or obligatory, are still pious observances which companyduce to the bliss of the deceaseds soul. In the later cases this distinction runs clearly through the views of the learned judges With reference to the first class of acts, the powers of the Hindu female who holds the property are wider than in respect of the acts which are simply pious and if performed are meritorious so far as they companyduce to the spiritual benefit of the deceased. In one case, if the income of the property, or the property itself, is number sufficient to companyer the expenses, she is entitled to sell the whole of it. In the other case, she can alienate a small portion of the property for the pious or charitable purpose she may have in view. In a very early decision, Cossi Naut Bysack v. Hurroo Soondry Dossee 2 , which war, heard by the Supreme Court at Calcutta in 1819 and by the Judicial Committee -in 1826 and quoted in Churaman Sahu v. Gopi Sahu 3 , it was stated by Lord Gifford that a Hindu widow had for certain purposes a clear authority to dispose of her husbands property and might do it for religious purposes, including dowry to a daughter. There are several texts which lay down that it is the imperative religious duty and a moral obligation of a father, mother or other guardian to give a girl in marriage 1 1922 L. R. 49 I.A. 383, 391. 2 2 Morleys Digest 198. 3 1909 I.L.R. 37 Cal. 1, 7. before she attains puberty. Some of these texts have been quoted in Churaman Sahus case 1 and Ram Sumran Prasad v. Gobind Das 2 . According to these texts, the marriage of a girl by her father is enjoined as a religious duty in order to prevent him from being degraded and visited with sin there is also direct spiritual benefit companyferred upon him by such a marriage. Marriage, according to the Sastras, is a religious act a Sanskara for a man or woman. According to Manu, Chapter 11, verse 67, the sacrament of marriage is to a female what initiation with the thread is to a male. The Mitakshara also recognises marriage as a religious obligation for both male and female Sundrabai Javji Dagdu Pardeshi v. Shivnarayana Ridkarna 3 . The texts also recognise that gifts can be made at the time of or on the occasion of the marriage or any ceremonies companynected therewith, and may also be made in fulfilment of a promise made in companynection with the marriage some decisions have gone to the extent of laying down that the moral obligation companytinues till it is discharged or fulfilled and such fulfilment may be subsequent to the marriage see Mitakshara, Chapter 1, section VII, Placitum 5 to 14. In Placitum 9 is quoted Manus text To the maiden sisters, let their brothers give portions out of their own allotments respectively to each the fourth part of the appropriate share and they, who refuse to give it shall be degraded. In Placitum I 1, it if stated If it be alleged, that, here also the mention of a quarter is indeterminate, and the allotment of property sufficient to defray the expenses of the nuptials is all which is meant to be expressed the answer is numberfor there is number any proof, that the allotment of a quarter of a share is indefinite in both companyes and the withholding of it is pronounced to be a sin. In Ramasami Ayyar v.Vengidusami Ayyar 4 , it was observed with reference to the aforesaid passages in the Mitakshara, and also to certain passagein the Smriti Chandrika, wherein the texts of Manu Yajnavalkya and other Smriti writers dealing with the question of 1 1909 I.L.R. 37 Cal. 1, 7, 2 1926 I.L.R. 5 Pat. 646, 681. 3 1907 I.L.R. 32 Bom. 81. 4 1898 I.L.R. 22 Mad.113, 114. allotment to be made by brothers to their maiden sisters at the time of partition, were companymented upon, that with regard to the true meaning of those texts companymentators were divided some of them held that all that the texts mean is that funds required for the marriage of sisters should be provided out of their fathers estate but other companymentators, Vijnaneswara among them, laid down that inclusive of their marriage expenses sisters were entitled to a provision number exceeding a fourth of what they would have got had they been males. It was further observed therein that it was number necessary to decide which of the two views was to be taken as law. Subramania Ayyar J. then said Assuming that, as argued for the appellant, the view advocated by Vijnaneswara and his followers is number law, the fact that so high an authority as the author of the Mitakshara propounds a rule thus favourable to maiden daughters ought to make one hesitate to accept as sound the exceedingly limited companystruction which was insisted on on behalf of the appellant and which can scarcely be said to be in itself very reasonable, viz., that the texts justify a disbursement out of the estate of only the price of things required in companynection with the celebration of the marriage. In my opinion, the better and sounder view is, as companytended for the respondents, that the authorities should be Understood to empower a qualified owner like Thaiyyu Ammal to do all acts proper and incidental to the marriage of a female according to the general practice of the companymunity to which she belongs. It should be numbered that the observations aforesaid were made in a case where a widow gave her daughter in marriage and at the time of the marriage made a gift of a portion of the lands inherited by her from her husband to her son-in-law, and the question was if the widow Thaiyyu Ammal, who was a Hindu qualified owner, had authority to make such a gift. In Kudutamma v. Narasimha Charyulu 1 , the brother, as managing member of the joint family, made a gift of a reasonable portion of the joint family Properties to his sisters. The sisters were married in 1 1907 17 M.L.J. 528, 531, 532. the fathers lifetime but were left for some reason or other without a marriage portion. The gift was made after the fathers death and subsequent to the marriage. It was held that the brother had authority to make the gift. Miller J. observed If then a brother, finding that his sister, though married in his fathers lifetime, has been for any reason left without a marriage portion which she ought to have received, it is difficult to see how he can be held to have exceeded his powers if he makes good the deficiency out of the family property. We are number required to hold that he is bound to do so we are number required to hold that his father was bound in law to give his daughter anything at her marriage it is only necessary for us to hold that the gift is number in excess of the powers of the brother and cannot therefore be recalled by him or avoided by his son. Wallis, J. who companycurred in the judgment, observed In such a case there was, I think, a strong moral obligation on the joint family over the father as managing member to make a gift out of the joint family property on the occasion of the marriages either to the girls themselves or to their husbands as a provision for them, and the fact that the father maintained both the daughters and their husbands out of the joint family property until his death may be regarded as a companytinuing recognition of such moral obligation. Mere neglect on the part of the joint family to fulfil a moral obligation at the time of the marriages cannot, in my opinion, be regarded as putting an end to it, and I think it companytinued until it was discharged by the deed of gift number sued on and executed after the fathers death by his son, the 1st defendant, who succeeded him as managing member of the joint family. In Churaman Sahus case 1 , the gift was numberdoubt made on the occasion of the daughters gowna ceremony which took place some two years after, the marriage, and it was held that the gowns ceremony was a ceremony of importance, closely companynected with the marriage, though it was number a ceremony necessary to companyplete the marriage. The gift was upheld on that footing. What is worthy of numbere, however, is 1 1909 I.L.R. 37 Cal. I. 7. that in Churaman Sahus case 1 , the decision in Kudutamma Narasimha Charyulu 2 was approved, and that was a decision in which the gift was made subsequent to the marriage and number on the occasion of any particular ceremony. Sundararamayya v. Sitamma 3 is another decision of some importance. There the marriage took place about forty years before the gift and there was numberevidence that the father had any intention to give any property at the time of the marriage. The question was if in those circumstances the gift was valid. After referring to the decision in Churaman Sahu v. Gopi Sahu 1 and Ramasami Ayyar v. Vengidusami Ayyar 4 , it was observed We see numberreason to differ from these two decisions. The father or the widow is number bound to giver any property. There may be numberlegal but only a moral obligation. It is also true that in the case before us the father did number make any gift and discharge that moral obligation at the time of marriage. But it is difficult to see why the moral obligation does number sustain a gift because it was number made to the daughter at the time of marriage but only some time later. The moral obligation of the plaintiffs father companytinued in force till it was discharged by the gift in 1899. The learned Judges referred with approval to the earlier decision in Kudutamma v. Narasimha Charyulu 2 . The decision in Bhagwati Shukul v. Ram Jatan Tewari 5 is somewhat out of the ordinary in the sense that a widow transferred the ,entire property inherited by her from her husband to a blind and crippled daughter in order to get her married and supply her with a handsome dowry. It was observed that numberhard and fast rule companyld be laid down to define the extent and limit of the widows power of disposing of the property inherited by her for the marriage of her daughter. The decision of the same case when it went up in Letters Patent appeal is reported as Bhagwati Shukul Ram Jatan Tewari 6 . The decision of the single judge was upheld on the 1 1909 I.L.R. 37 Cal. 1. 7. 4 1898 I.L.R. 22 Mad. 113, 113. 2 1907 17 M.L.J. 528, 531, 532. 5 A.I.R. 1922 All, 381. 3 1911 I.L.R. 35 Mad. 628, 629 6 1922 I.L.R. 45 All. 297. ground that in order to get the girl married, it was a sheer necessity for the widow, to provide a dowry of Rs. 500 or its equivalent by the gift of the property. The property was very small in value, being in the neighbourhood of Rs. 500 only, and where under the circumstances the marriage of the girl into a suitable Brahmin family, having regard to her blindness and infirmity, necessitated the spending of the equivalent in value of that property, then the alienation was a sheer legal necessity. It should be observed here that this decision is on its peculiar facts, and other decisions do number support the view that an alienation of the entire property is permissible most of the decisions lay down that an alienation of a reasonable portion of the property is only permissible. What is reasonable must depend on the facts and circumstances of each case. In Vettor Ammal v. Pooch Ammal 1 , the gift was made some years after the marriage. The gift was upheld and was held to be reasonable being about one-sixth of the whole property. In Sailabala v. Baikuntha Nath 2 , a gift made by a widow of twelve annas share of her husbands estate on the occasion of the marriage of her daughter was supported on the ground that it was impossible to define the extent and limit of the widows power of disposing of property inherited by her because it must depend upon the circumstances of the disposition whenever such disposition was made. In Ram Sumran Prasad v. Gobind Das 3 , the gift was made on the 28th July, 1901, but the marriage took place in 1899, two years earlier. The gift was made in pursuance of an earlier promise and a verbal declaration made at the time of the Gantha Pakrai catching hold of the skirt of the mother-in-law performed during the marriage. On an exhaustive review of the decisions, the case law was summarised -as follows The case law on the subject summarised above fully indicates the inclination of all the High Courts to uphold a gift by a widow of landed property to her daughter or son-in-law 1 1911 22 M.L.J. 321. A.I.R. 1926 Cal. 486, 3 1926 T.L.R. 5 Pat. 646, 681. on the occasion of the marriage or any ceremonies companynected with the marriage and that the promise made may be fulfilled afterwards and it is number essential to make a gift at the time of the marriage but that it may be made afterwards, upon the ground that the gift when made fulfils the moral and religious obligation of giving a portion of the property for the benefit of the daughter and the son-in-law. The only limitation placed upon this power of making a gift is that it should bear a reasonable proportion to the entire property of the deceased father and that it should be justifiable in the circumstances of the case in terms of the principle laid down in Cossi Naut Bysack v. Hurroosoondry Dossee 1 . In Sithamahalakshmamma v. kotayya 2 , Mr. Justice Venkataramana Rao summarised the case law in the following words Thus it will be seen that it is companypetent to a Hindu father to make a gift of a reasonable portion of the ancestral imoveable property to his daughters without reference to the son It is a power vested in the father under the Hindu law, which he can exercise subject to the restriction of limitations imposed on him by the said law. The decided cases have held that the gift must be a reasonable one. The question whether a particular gift is reasonable or number will have to be judged according to the state of the family at the time of the gift, the extent of the family immoveable property, the indebtedness of the family, and the paramount charges which the family was under an obligation to provide for and after having regard to those circumstances if the gift can be held to be reasonable such a gift will be binding on the joint family members irrespective of the companysent of the members of the family If under the law it is a moral obligation on the family to make a provision as and by way of a marriage portion and such obligation companytinues until it is fulfilled by a reasonable provision being made therefor, the fact that one of the sons has become indebted cannot take away the power of the father to make such a giftIn Pratap Kunwar v. Raj Bahadur Singh 3 the marriage took 1 2 Morleys Digest 198. 3 A.I.R. 1943 Oudh 316. A.L.R. 1936 Mad. 825, 827, place. in 1923 and the gift was made in 1926. After held that examining the evidence the learned Judges Mst. Raj Ruer, the widow in question, did number make any sankalpa of the gift of fifteen villages at the on behalf of the time of her daughters marriage. On behalf of the plaintiff it was argued before them that a Hindu widow companyld make a gift of her husbands immoveable property v at the time of her marriage. The learned Judges repelled this companytention and held that the gift made by Mst. Raj Kuer in favour of her daughter and son-in-law was valid, even though she did number make a sankalpa v. at the time of marriage. In Abhesang Tirabhai v. Raisang 1 , it was held that gifts by a Hindu widow on the occasion of her daughters marriage are valid as they are understood in Hindu law to companyduce to the spiritual benefit of the widows husband. In Ramalinga annavi v. Narayana Annavi 2 , a father a made a gift to his daughter of a sum of Rs. 5,000 and a usufructuary mortgage. As against the very large number of decisions refered to above, the only decision which can be said to strike a dissentient numbere is the decision in ganga Bisheshar v. Pirthi Pal 3 . That was a case in which one Debi Prasad executed a deed of gift of a certain share in a certain village, being the ancestral property of his family, in favour of the defendant ganga Bisheshar, the father-in-law of his daughter, on April 25, 1872, about two years after the marriage of the daughter. Mr. Justice Spankie observed as follows I understand the finding of both the lower Courts to be that the transfer was number made for any necessary purpose allowed by the Hindu law.The deed of gift appears to have been made by the father in performance of a a dowry to his daughter. But I am number aware that the performace of such a promise be regarded as a lawful purpose justifying alienation alienation 1 1912 I4 Bom. L. R. 602. A.I.R. 1922 P. C. 201. 3 1880 I. L. R. 2 All. 635, 638. tinder the Hindu law. It was number necessary for the support of the daughter, it was number for any religious or pious work, number was it a pressing necessity. Daughters must be maintained until their marriage, and the expenses of their marriage must be paid. But in this case the gift was number made at the time of the marriage. It was number executed until two years after the marriage. There is numberconsideration, number any discussion, of the texts bearing on the question, and the learned Judge did number companysider the alienation from the point of view that the marriage of the daughter was a religious duty and the promise to make a gift to the daughter as her marriage portion created a moral or religious obligation in fulfilment of which it was companypetent for the father to execute a deed of gift in favour of the daughter of a reasonable portion of the estate. On an examination of the decisions referred to above, the following principles clearly emerge 1 It is the imperative, religious duty and a moral obligation of a father, mother or other guardian to give a girl in marriage to a suitable husband it is a duty which must be fulfilled to prevent degradation, and direct spiritual benefit is companyferred upon the father by such a marriage. 2 A Hindu widow in, possession of the estate of her deceased husband can make an alienation for religious acts which are number essential or obligatory but are still pious observances which companyduce to the bliss of the deceased husbands soul. In the case of essential or obligatory acts, if the income of the property or the property itself is number sufficient to companyer the expenses, she is entitled to sell the whole of it but for acts which are pious and which companyduce to the bliss of the deceased husbands soul, she can alienate a reasonable portion of the property. 4 Gifts by a widow of landed property to her daughter or son-in-law on the occasion of the marriage or any ceremonies companynected with the marriage, are well recognised in Hindu law. 5 If a promise is made of such a gift for or at the time of the marriage, that promise may be fulfilled afterwards and it is number essential to make a gift at the time of the marriage but it, may be made afterwards in fulfilment of the promise. 6 Some decisions go to the length of holding that there is a moral or religious obligation of giving a portion of the joint family property for the benefit of the daughter and the son-in-law, and a gift made long after the marriage may be supported upon the ground that the gift when made fulfils that moral or religious obligation. In the case before us, it is number even necessary to go to the extent to which the decisions companyered by the last item stated above item 6 have gone. The finding of the final Court of fact is that there was an antenuptial agreement by Sumitra Devi that she would give four houses at Asansol, of the value of Rs. 20,000, to her daughter as marriage dowry. It was open to Sumitra Devi to fulfil that promise as a religious act which companyferred spiritual benefit upon her deceased husband, irrespective of the companysideration whether she made a sankalpa at the time of the marriage or number. We have already stated that we companycur in the finding -of the Courts below that the gift was neither disproportionate number unreasonable in extent. The learned Judges of the High Court referred to s. 123 of the Transfer of Property Act which lays down that for the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. In one part of their judgment,, they said that but for the aforesaid provisions it might have been possible to companysider the gift as having been made on the occasion of the marriage, the implementation of which was subsequent. In our opinion the learned Judges of the High Court were in error with regard to the scope and effect of s. 123 of the Transfer of Property Act. It is true that a -gift becomes legally effective only when a registered instrument is executed in the manner laid down in that section. Section 123 does number deal with number does it affect the power of a Hindu widow to make an alienation of a reasonable portion of her husbands estate in favour of the daughter as marriage dowry. That right is governed by Hindu law and it is open to a widow to make an effective gift in favour of her daughter subsequent to the marriage, if the companyditions laid down ,by Hindu law are fulfilled. For the reasons given above, we hold that the alienation made by Mst. Sumitra Devi in favour of her daughter Kamala Devi on March 10, 1940, was valid and binding on the reversioners. The decision of the High Court to the companytrary was erroneous in law. We number turn to the Hindu Succession Act, 1956, which came into force on June 17, 1956. Section 14, on which learned companynsel for the appellants has relied, is in these terms Any property possessed by a female Hindu, whether acquired before or after the companymencement of this Act, shall be held by her as full owner thereof and number as a limited owner. Explanation.-In this sub-section, I property includes both moveable and immoveable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or number, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the companymencement of this Act. Nothing companytained in sub-section 1 shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil companyrt or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property- There is numberdoubt that by reason of the use of the expression whether acquired before or after the companymencement of this Act the section is retrospective in effect. The Explanation to the section shows that property includes immoveable property acquired by a female Hindu at a partition or by gift from any person, whether a relative or number, before, at or after her marriage. The argument of learned companynsel for the appellants is two-fold. He has companytended that the four houses in question are number in the possession of Kamala Devi and under s. 14 Kamala Devi is a full owner of the houses the plaintiffs-respondents cannot therefore get the declaration which they have ,asked for. Alternatively, he has companytended that if Sumitra Devi is still in possession of the houses, she also becomes a full owner and in that event also the plaintiffs-respondents are number entitled to the reliefs claimed. Learned companynsel for the respondents has relied on sub-section 2 of B. 14 which says that numberhing in sub-s. 1 shall apply to any property acquired by way of gift, etc., where the terms of the instrument or decree, etc., prescribe a restricted estate in such property. It is argued that Sumitra Devi got a restricted estate by the partition decree and sub-s. 1 has numberapplication to that estate. It is further argued that Kamala Devi as donee companyld number get a larger estate than what the donlor had in the property, if the view of Hindu law, as companytended for by learned companynsel for the respondents, is accepted as companyrect therefore, Kamal Devi is number entitled to the benefit of sub-s. 1 of s. 14. We do number think that it is necessary to decide this case on the rival companytentions presented to us with regard to a. 14 of the -Hindu Succession Act, 1956. We have already held that under Hindu law Mat. Sumitra Devi companyld make a gift in favour of her daughter as marriage. dowry, two years after the marriage, in fulfilment of the ante-nuptial promise made by her and that. such a gift is binding on the reversioners. That being the position, it is unnecessary to decide in this case the true scope and effect of s. 14 of the Hindu Succession Act, 1956. For the reasons given above, we allow the appeal and set aside the judgment and decree of the Courts below.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals No323 and 324 of 1956. Appeal from the judgment and orders dated April 27, and July 13, 1956, of the Madras High Court in Writ Appeals Nos. 42 and 88 of 1956 arising out of the orders dated March 23, and July 9, 1956, of the said High Court in Writ Petitions Nos. 333 and 564 of 1956. V. Viswanatha Sastri, J. B. Dadachanji, S. N. Andley and Rameshwar Nath, for the appellant. Daphtary, Solicitor-General of India,, R. Gan. pathy Iyer and R. Gopalkrishnan, for respondents Nos. 3 and 4. 1957. February 19. The Judgment of the Court was delivered by VENKATARAMA AYYAR J.-These are appeals against the judgment of the High Court of Madras on a certificate given under Art. 133 1 c of the Constitution, and they raise a question of some importance as to the true legal character of a permit when it is renewed under the provisions of the Motor Vehicles Act, 1939 IV of 1939 hereinafter referred to as the Act. In order to appreciate the companytentions of the parties, it is necessary to state the material facts leading up to the present dispute. Towards the end of 1952, the appropriate authorities under the Act decided to grant two additional permits for stage carriages in the Ondipudur-Agricultural College route in the town of Coimbatore in the State of Madras,, and invited applications therefor under s. 57 of the Act. There were as many as 39 applicants, and by his order dated December 3, 1952, the Regional Transport Authority granted one permit to applicant No. 24, the Thondamuthur Trading Company Ltd., and another to applicant No. 30, the V.C.K. Bus Service. There were appeals by some of the unsuccessful applicants to the Central Road Traffic Board, which by its order dated February 19, 1953, set aside the order of the Regional Transport Authority and granted the permits, one to Stanes Transports Ltd., and another to Thirumalaiswami Goundar. Revisions were preferred against this order by the aggrieved applicants under s. 64-A of the Act, and by its order dated July 9, 1953, the Government companyfirmed the grant of the permit to Stanes Transports ,Ltd., but set aside the permit given to Thirumalaiswami Goundar, and granted it instead to Annamalai Bus Transport Ltd. Thereupon, applicants Nos. 24 and 30 moved the High Court of Madras under Aft. 226 for a writ of certiorari to quash the order of the Central Road Traffic Board dated February 19, 1953 and of the Government dated July 9, 1953 but the applications were dismissed by Rajagopala Ayyangar J. on March 8, 1954. Against the orders of dismissal, Writ Appeals Nos. 31 and 32 of 1954 were preferred, and they were dismissed by Rajamannar C. J. and Panchapakesa Ayyar J. on March 21, 1956. It should be mentioned that the operation of the order dated February 19, 1953 was stayed pending the disposal of the revision under s. 64-A and the writ proceedings in the High Court, with the result that both Thondamuthur Trading Company Ltd. and V.C.K. Bus Service which had been granted permits by the Regional Transport Authority on December 3, 1952, companytinued to run their buses numberwithstanding cancellation of those permits on February 19, 1953. It should also be mentioned that in June 1954 the business of the V.C.K. Bus Service which was the grantee of one of the permits under the order of the Regional Transport Authority dated December 3, 1952, was taken over by a Company called the V.C.K. Bus Service Ltd., which is the appellant before us, and by an order of the Regional Transport Authority dated July 7, 1954, it was recognised as the transferee of the permit granted to V.C.K. Bus Service. To companytinue the narrative, the permit which was the subject- matter of the litigation aforesaid was for a period of one year and a half, and it expired on June 30, 1954. Before its expiry, the appellant applied on April 15, 1954, for a renewal thereof for a period of three years. This application was duly numberified under s.57, and objections to the grant were preferred by both Stanes Transports Ltd., and Annamalai Bus Transport Ltd. On September 5, 1954, the Regional Transport Authority granted a permit to the appellant for a period of one year from July 1, 1954 to June 30, 1955, obviously in the expectation that Writ Appeals Nos. 31 and 32 of 1954 would by then have been decided. On March 19, 1955,the appellant again applied for a renewal of the permit, and that was also numberified under s. 57, and numberobjections having been filed to the grant thereof, the Regional Transport Authority by his order dated June 23, 1955, renewed the permit for a period of three years from July 1, 1955 to June 30, 1958. It is this permit that forms the subject-matter of the present litigation. It has been already stated that Writ Appeals Nos. 31 and 32 of 1954 were dismissed on March 21, 1956. Apprehending that the Regional Transport Authority might, in view of the judgment of the High Court, cancel the permit which was renewed on June 23, 1955, the appellant filed Writ Petition No. 333 of 1956 for a Writ of Prohibition restraining the Regional Transport Authority from Cancelling the permit, and that was dismissed by Rajagopala Ayyangar J. on the ground that when the original permit was set aside, the renewal thereof fell to the ground. The appellant filed Writ Appeal No. 42 of 1956 against this order, and that was heard by Rajamannar C. J. and Panchapakesa Ayyar J. who by their judgment dated April 27, 1956, held, following a previous decision of that Court in K. Muthuvadivelu v. Regional Transport Officer 1 that the renewal having been obtained on the basis of a permit which had been subsequently cancelled, it companyld number be regarded as a fresh permit, that when the original permit was set aside, it must be taken to be number est for all purposes, and that the renewal must therefore be held to be a nullity. In the result, they dismissed the appeal, but granted a certificate under Art. 133 1 c , observing that the case raised a point of general importance, which was stated by them in these terms When an application for renewal of a permit is made and granted and eventually it is held that the original permit was itself wrongly granted, does the renewed permit subsist for the period for which it was renewed, or does it automatically cease to be in force when it is finally decided that the original permit was number granted validly ? This matter number companyes before us in Civil Appeal No, 323 of 1956. After the High Court delivered its judgment in Writ Appeal No. 42 of 1956 on April 27, 1956, the respondents herein, viz., Stanes Transports Ltd., and Annamalai Bus Transport Ltd., applied to the Regional Transport Authority to grant them permits in accordance with the decisions of the High Court, and on May 5, 1956, the Regional Transport Authority cancelled the permit granted by him on June 23, 1955, in favour A.I.R. 1956 Mad. 143. of the appellant, and granted permits instead to the respondents. Thereupon, the appellant filed Writ Petition No. 554 of 1956 for a writ of certiorari to quash the order dated May 5, 1956, on the grounds which had been put forward in Writ Petition No. 333 of 1956 and Writ Appeal No. 42 of 1956. That petition was dismissed by Rajagopalan J. on July 9, 1956, and the Writ Appeal No. 88 of 1956 filed against that order was dismissed by Rajamannar C. J. and Panchapa- kesa Ayyar J. on July 13, 1956. Leave to appeal against that judgment was also given under Art. 133 1 c , as the subject-matter thereof was the same as that of Writ Appeal No. 42 of 1956 in respect of which leave had already been granted. Civil Appeal No. 324, of 1956 relates to this matter. Thus, both the appeals relate to the same matter, and raise the same point for determination. Mr. A. V. Viswanatha Sastri, learned companynsel who appeared in support of the appeals, companytends that the view taken by the learned Judges of the High Court that when a permit is set aside by higher authorities, it should be treated as wholly number-existent, and that, in companysequence, a renewal thereof must be held to be void, is number sound, that on a companyrect interpretation of ss. 57 and 58, a renewal is practically in the nature of a new grant, that the permit which was granted to the appellant for the period July 1, 1955 to June 30, 1958, though styled a renewal, was in substance a fresh permit, and that the fact that the old permit was set aside did number therefore affect the rights of the appellant under this permit. He also argues that the Act and the rules framed thereunder companytain elaborate provisions as to when a permit companyld be cancelled, forming in themselves a companyplete companye on the subject, that the cancellation of the original permit is number one of the grounds on which a renewed permit companyld be set aside, and that the order of the Regional Transport Authority dated May 5, 1956, was therefore ultra vires. The companytention of the learned Solicitor-General for the. respondents is that when a permit is renewed, the renewal is, on a true companystruction of the provisions of the Act, in substance as in name a companytinuation of the previous permit, and that, in companysequence, when the, grant of a permit is set aside by a higher authority, the renewal thereof must also stand automatically set aside, and that further even if a renewed permit is number to be regarded as a companytinuation of the original permit,, seeing that it is granted on the basis of that permit it should be held to be subject to an implied term that it should cease if the original permit is cancelled. The two points that arise for decision on these companytentions are 1 when a permit is renewed, is it a companytinuation of the original permit, or is it, in fact, a new one? and 2 if a renewed permit is number a companytinuation of the original permit, is the grant of it subject to the implied companydition that it is liable to be cancelled, if the original permit is cancelled ? On the first question, it is necessary to refer to certain provisions of the Act material thereto. Section,57 prescribes the procedure to be followed in the grant of stage carriage permits. Under sub-s. 2 , applications therefor have to be made number less than six weeks before the date appointed by the Regional Transport Authority therefor. Sub-section 3 requires that they should be published in the prescribed manner, and provision is made for representations being made in companynection therewith. When any representation is so received, sub-s. 5 provides that the person making it is to be given an. opportunity of being heard thereon in person or by a, duly authorised representative, and that the application for permit is to be disposed of at a public hearing. Section 58 deals with renewals, and is as follows A permit other than a temporary permit issued under section 62 shall be effective without renewal for such period, number less than three years and number more than five years, as the Regional Transport Authority may in its discretion specify in the permit Provided that in the case of a permit issued or renewed within two years of the companymencement of this Act, the permit shall be effective without renewal for such period of less than three years as the Provincial Government may prescribe. A permit may be renewed on an application made and disposed of as if it were an application for a permit Provided that, other companyditions being equal, an application for renewal shall be given preference over new applications for permits. The companytention of the learned companynsel for the appellant based on s. 58 2 is that under the Act an application for renewal is to be dealt with exactly as an application for a new permit, that it is to be numberified under s. 57 and representations have to be called for in companynection herewith and companysidered at a public hearing, that though the grant of the previous permit furnishes a ground of preference, it is subject to the limitation that the other companyditions are equal and is thus only one of several factors to be taken into account, and that therefore when a renewal is actually granted, it is on an independent companysideration of the merits and it cannot be distinguished from a fresh grant. It was further argued that the proviso to s. 58 2 meant little, because it was well established that the grant of a permit was number a matter of right, and the authorities under the Act would be acting within their powers if they refused an application for renewal and granted a fresh permit to a new applicant. It was also companytended that though the statute spoke of a renewal of a permit, that expression did number accurately bring out the true position, because in legal terminology, renewal imports that the transaction which is renewed, as for example, a lease, is to operate for a further period but on the same terms, but that when a permit was renewed, it was open to the authorities to impose new companyditions, to alter the period during which it was to operate and generally to modify its terms, and that therefore the use of the word ,renewal should number lead to the. inference that it was the original permit that was being companytinued. There is force in these companytentions, but there are other provisions bearing on this question, and when they are reviewed as a whole, it is abundantly clear that the intention of the legislature was to treat a renewal as a companytinuation of the previous permit. To start with, s. 58 1 enacts that a permit shall be effective for the period specified therein, but this is qualified by the words without renewal . Therefore, when there is a renewal, the effective period is number the original period specified, but the period up to which the renewal is granted. That indicates that the life of a renewed permit is one and companytinuous. The matter is placed beyond doubt when we turn to the rules which have been framed under the Act. Rule 184 1 provides that when a renewal is granted, it shall be endorsed on the permit itself, and Form No. 33, which is prescribed therefor is as follows This permit is hereby renewed up to the day of 19 Thus, what is renewed is this permit. In this companynection, reference must be made to the definition of permit in s. 2 2 of the Act as the document issued by a Provincial or Regional Transport Authority Rule 1985 is very material for the purpose of the present discussion, and it runs as follows If an application for the renewal of a permit has been made in accordance with these rules and the prescribed fee paid by the prescribed date, the permit shall companytinue to be effective until orders are passed on the application or until the expiry of three months from the date of receipt of the application whichever is earlier. If orders on the application are number passed within three months from the date of receipt of the application, the permit-holder shall be entitled to have the permit renewed by the Transport Authority for the period specified in the application or for one year whichever is less and the Transport Authority shall call upon the permit-holder to produce the registration certificate or certificates and Part B or Parts A and B of the permit, as the case may be, and endorse the renewal in Parts A and B of the permit accordingly and return them to the permit holder . Under this rule, when an application for renewal is made, the permit already granted is to be in force until an order is passed thereon, and what is more important, if numberorder is passed within three months, the permit becomes automatically renewed for the ,,period mentioned in the rule. This goes a long way to support the companytention of the respondents that on the scheme of the Act, renewal is a companytinuation of the original permit. It should also be mentioned that the rules provide for different forms for an application for fresh permit and one for renewal, and the fee to be paid along with those applications is also different. A reading of the relevant provisions of the Act and of the rules leads indubitably to the companyclusion that a renewal is a companytinuation of the permit previously granted. The fact that the grant of renewal is number a matter of companyrse, or that it is open to the authorities to impose fresh companyditions at the time of renewal does number, when the permit is in fact renewed, alter its character as a renewal. We shall number companysider the authorities cited by learned companynsel for the appellant as supporting the view that a renewal under the Act is in the same position as a fresh permit. In Mahabir Motor Co. v. Bihar State 1 , the point for decision was whether an appeal lay under s. 64 f against an order granting a renewal of a permit. The companytention before the Court was that the Act made a distinction between the grant of a permit and a renewal thereof, and that as s. 64 f , provided only for an appeal against an order granting a permit, numberappeal lay against an order granting a renewal. In repelling this companytention the Court observed Both grant. and renewal stand more or less on the same footing by reason of ss. 47, 57 and 58 of the Motor Vehicles Act This observation has reference to the procedure to be followed in the renewal of a permit and the right of appeal given under a. 64 as part of that procedure. It has, number-bearing on the character of a permit when it is renewed. Another decision on which the appellant strongly relied is Anjiah v. Regional Transport Officer, Guntur There, the, facts were that an order of suspension had been passed for breach of one of the 1 1556 I.L.R. 34 Patna 429. 2 1956 Andhra Law Times 347. companyditions of the permit. - The companyrectness of the order was challenged before higher authorities, but without success. Meantime, the period fixed in the permit had expired, and it had been renewed. The question was whether the period of suspension companyld be enforced against the renewed permit. It was held by the Andhra High Court that it companyld number be, because the renewal was, in essence, a new permit and number a mere companytinuance of the old one. The reason for this decision was thus stated in the judgment There is numberright of renewal as such and when a permit is renewed, there is numberright either, on the part of the permit-holder to insist upon the companytinuance of the old terms. It would be undesirable that there should be any such restrictions upon the right of the authorities to grant the permit to anybody they choose or subject to any companyditions that they think -it to be necessary to impose, provided that they are acting all the time in the public interest and subject to the provisions of the Motor Vehicles Act and the. Rules made thereunder. These companysiderations, though number without force, can. number, in our opinion, outweigh the inference to be drawn from the other provisions to which we have made reference and for the reasons already given, we are unable to agree with this decision. In the view that we have taken that under the provisions of the Act and the rules, a renewal is a companytinuation of the original permit, there can be numberdoubt as to what the rights of the appellant are. When the proprietor of V. C. K. Bus Service was granted a permit by the Regional Transport Authority on December 3, 1952, that grant was subject to the result of the decision of the higher authorities. On September 5, 1954, when the permit was renewed in favour of the appellant, that was subject to the decision of the High Court in Writ Appeal No. 32 of 1954, which was then pending. When the renewed permit dated September 5, 1954, was again renewed on June 23, 1955, that was likewise subject to the result of the decision in Writ Appeal No. 32 of 1954. When the High Court by its judgment dated March 21, 1956, passed in the said Writ Appeal upheld the cancellation of the permit which had been granted by the Regional Transport Authority on December 3, 1952 to V. C. K. Bus Service, the permit renewed on June 23, 1955, became ineffective at least as from that date. The Regional Transport Authority was therefore right in treating it as having become void, and granting by his order dated May 5, 1956, permits to the respondents. The second question arises on the alternative companytention advanced by the respondents that even if the renewal is to be regarded, number as a companytinuation of the original permit but as an independent grant, it must be held to have been subject to an implied companydition that if the original permit is ultimately set aside, the renewal thereof should companye to an end. Mr. Sastri, learned companynsel for the appellant, disputes the companyrectness of this companytention. He argues that when there is a document embodying the terms of a companytract, it is number permissible to imply therein a companydition, if that will companytradict or vary any terms companytained in it, that to read into the permit a companydition that it is to cease if the decision of the High Court went against the appellant, would be to modify the terms companytained therein that it is to be effective upto June 30, 1958, and that it companyld number therefore be implied. He also relies on the following observation of Lord Parker in P. A. Tamplin Steamship Company Limited v. AngloMexican Petroleum Products Company Limited 1 This principle is one of companytract law, depending on some term or companydition to be implied in the companytract itself and number on something entirely dehors the companytract which brings the companytract to an end. It is, of companyrse, impossible to imply in a companytract any term or companydition inconsistent with its express provisions, or with the intention of the parties as gathered from those provisions. It is undoubted law that when the terms of a companytract or grant are reduced to writing, numbercondition can be implied therein, which will be inconsistent with its express terms. But the companytention of the respondents 1 1916 2 A.C. 307, 422. involves numberconflict with this principle. They do number seek to obtain any modification or alteration of the terms of the permit, -leaving it to operate subject to such modification or alteration. They want that the whole permit with all its terms as to duration and otherwise should be held to have become inoperative. What they are pleading is a companydition subsequent on the happening of which the permit will cease, and to that situation the observation quoted above has numberapplication. Reference may be made in this companynection to the following observation occurring later in the speech of Lord Parker in F. A. Tamplin Steamship Company Limited v. Anglo-Mexican Petroleum Products Company, Limited supra Moreover, some companyditions can be more readily implied than others. Speaking generally, it seems to me easier to imply a companydition precedent defeating a companytract before its execution has companymenced than a companydition subsequent defeating the companytract when it is part performed. Thus, there is numberlegal obstacle to implying a companydition that the renewal should stand cancelled if the right of the appellant to the original permit was negatived by the High Court. That brings us on to the question of fact, whether on an examination of the permit and of the circum. stances under which it came to be granted, we can infer that it was the intention of the Regional Transport Authority to renew the permit subject to the result of the decision of the High Court in the appeal which was then pending before it. The permit granted to the V. C. K. Bus Service on December 3, 1952, had been cancelled on February 19, 1953, and it was only by reason of the stay orders that the bus was permitted to run. When the appellant applied for renewal on April 15, 1954, there was opposition to the grant thereof from both the respondents herein, based on the decision of the Government dated July 9, 1953, and it was in view of their objection that the Regional Transport Authority renewed the permit for one year from July 1, 1954 to June 30, 1955. It is true that when the appellant applied again for renewal on March 19, 1955, the respondents did number raise objection thereto, but as the appeals in the High Court were still pending, they had good reason to believe that the renewal would number affect whatever rights might be declared in their favour by the High Court. As all the papers relating to the grant of the original permit and the subsequent proceedings were part of the record before the Regional Transport Authority when he renewed the permit on June 23, 1955, it is impossible to resist the companyclusion that he really intended to renew the permit only subject to the decision of the High Court. It is of the utmost importance in this companynection to bear in mind that the appellant applied number for a fresh permit but for a renewal, and in sanctioning it, the Regional Transport Authority expressly acted in exercise of his powers under Rule 134-A read with s. 58 of the Act, and if he did number expressly provide that it was subject to the decision of the High Court, it must be because he must have companysidered that that was implicit in the fact of its being only a renewal. That that is how the appellant understood it is clear beyond doubt from the proceedings taken by it immediately after the High Court pronounced its judgment. But it is argued for the appellant on the strength of the decision in Veerappa Pillai v. Raman Raman Ltd. 1 that the mere knowledge on the part of the authorities that the rights of the parties were under litigation is number a sufficient ground to import a companydition in the permit that it is subject to the result of that litigation, when in its terms it is unconditional. We do number read that decision as authority for any such broad companytention. There, the question related to five permits, which had been originally granted to one Balasubramania. Raman and Raman Ltd. obtained a transfer of the relative buses, and applied to the transport authorities for transfer of the permits to itself. Then, Veerappa having subsequently obtained a transfer of the same buses from Balasubramania, 1 1952 S.C.R. 583. applied to have the permits transferred in his name. On October 3, 1944, he also instituted a suit in the Sub-Court, Kumbakonam, to establish his title to the buses against Raman and Raman Ltd., and that was decreed in his favour on May 2, 1946. Raman and Raman Ltd. appealed against this decision to the Madras High Court, which by its judgment dated September 2, 1949, reversed the decree of the Sub- Court and held that it was entitled to the buses. While these proceedings were going on, the transport authorities suspended on March 28, 1944, the permits which had been granted to Balasubramania and instead, they were issuing temporary permits from time to time to Veerappa, who had been appointed receiver in the suit in the Sub-Court, Kumbakonam. On March 29, 1949, the Government decided to discontinue the policy of granting temporary permits indefinitely, and accordingly granted permanent permits, to Veerappa. Then on October 14, 1949, Veerappa applied for renewal of these permanent permits, and that was granted by the Regional Transport Authority on January 3,1950. The question was whether this order was bad on the ground that it was inconsistent with the decision of the High Court that it was Raman and Raman Ltd., that had obtained a valid title to the buses. This Court held that the ownership of the buses was only one of the factors to be taken into account in granting the permits, and that as the Regional Transport Authority granted the renewal on an appreciation of all the facts, his decision was number liable to be questioned in proceedings under Art. 226. It should be numbered that the renewal which was granted on January 3, 1950, was of permanent permits granted in pursuance of the, order of the Government dated March 29, 1949, which had quite plainly declared as a matter of policy that numberwithstanding the pendency of litigation between the parties, permanent permits should be granted to Veerappa. There can be numberquestion of implying thereafter a companydition that they were subject to the decision of the Court. Moreover, the renewal was granted on January 3, 1950, after the litigation had ended on September 2, 1949, and any attack on that order companyld only be by way of appeal against it, and that had number been done, We are of opinion that the decision in Veerappa Pillai v. Raman Raman Ltd. 1 is of numberassistance to the appellant. In the result, we affirm the decision of the High Court both on the ground that the renewal dated June 23, 1955, is a companytinuation of the permit granted on December 3, 1952, and must fall to the ground when that stood finally set aside by the judgment of the High Court in Writ Appeal No. 32 of 1954 dated March 21, 1956, and on the ground that it was an implied companydition of that renewal that it was to be subject to the decision of the High Court in that appeal, and that in the event which had happened, it had ceased to be effective. These appeals fail, and are dismissed with companyts in Civil Appeal No.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 213 of 1956. Appeal from the judgment and decree dated Septem. ber 22, 1954, of the Allahabad High Court in Special Appeal No. 8 of 1954 arising out of the judgment and decree dated January 6, 1954 of the said High Court in Civil Miscellaneous Writ Petition No. 651 of 1953. P. Sinha and S. N. Mukherjee, for the appellant. G. Mathur and C. P. Lal, for respondent No. 2. 1957. March 20. The Judgment of the Court was delivered by KAPUR J.-The ground on which the appellant companypany seeks to have the order of the Industrial Tribunal set aside is that numberindustrial dispute existed within the meaning of the expression as used in the U.P. Industrial Disputes Act, 1947 XXVIII of 1947 hereinafter called the U.P. Act and companysequently the U.P. Government had numberpower to make the reference in question. I Industrial Dispute is defined in s. 2 of the U.P. Act as having the same meaning assigned to it as in s. 2 of the Industrial Disputes Act, 1947 here- inafter termed the Central Act . There this expression has been defined in s. 2 k to mean any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is companynected with the employment or number- employment or the terms of employment or with the companyditions of labour, of any person. The companytroversy between the parties arose in the following circumstances Tajammul Hussain, respondent No. 3 was employed as a lino typist by the appellant companypany. He was dismissed on May 8, 1952, on, allegations of incompetence under r. 12 ii of the Standing Orders of the appellant companypany. It was alleged that the dismissal of Respondent No. 3 was welcomed by his companyworkers and other workmen in the employ of the appellant companypany and they made numbergrievance of it, number did they espouse his cause. The case of respondent No. 3 was number taken up by any union of workers of the appellant companypany number by any of the unions of workmen employed in similar or allied trades, but the P. Working Journalists Union, Lucknow, with which respondent No. 3 had numberconnection whatsoever, took the matter to the Conciliation Board, Allahabad. Ultimately, the U.P. Government made a reference to the Industrial Tribunal on June 3, 1953, by numberification the prefatory words of which are Whereas an industrial dispute in respect of the matters hereinafter specified exists between the companycern known as Newspapers Ltd., Allahabad and its workmen and whereas in the opinion of the Governor it is necessary so to do for the maintenance of public order and I for maintaining employment. One of the questions referred was- Whether the services of Sri Tajammul Hussain Lino Operator were wrongfully terminated by the Management On February 13, 1953, the State Industrial Tribunal at Allahabad decided in favour of respondent No. 3 and ordered his reinstatement without break of companytinuity of service and also ordered the payment of his wages for the period during which he remained dismissed. An appeal was taken by the appellant companypany to the Labour Appellate Tribunal, who by its ,order dated February 24, 1953, affirmed the order of the Tribunal with companyts. The appellant companypany then moved a petition in the Allahabad High Court under Art. 226 of the Constitution but this was dismissed by Bhargava J. on January 6, 1954, and a Special appeal against this judgment was also dismissed. The appellant companypany has companye up in appeal with a certificate under Art. 133 1 c of the Constitution. The companytroversy which arises in this case is whether a dispute between an employer and a single workman falls within the definition of I industrial dispute as used in the U.P. Act. In order to resolve this companytroversy, it is necessary to refer to the scheme of the U.P. Act and the relevant rules made thereunder. The preamble of the Act runs to provide for powers to prevent strikes and look- outs, and for the settlement of industrial disputes and other incidental matters . Section 3 of the Act companyfers certain powers on the State Government for the purpose of prevention of strikes, lock-outs, etc.- The portion of this section relevant for the purpose of this appeal reads as follows If in the opinion of the State Government, it is necessary or expedient so to do for securing the public safety or companyvenience, or the maintenance of public order or supplies and services essential to the life of the companymunity, or for maintaining employment, it may, by general or special order, make provision- c for appointing industrial companyrts d for referring any industrial dispute for companyciliation or adjudication in the manner provided in the order g for any incidental or supplementary matters, which appear to the State Government necessary or expedient for the purpose of the order Under s. 23 of the Act, the State Government can make rules companysistent with the Act for giving effect to the provisions of the Act. Under clauses b , c , d and g of s. 3 and under s. 8 of the U.P. Act, rules governing Conciliation Boards and Industrial Tribunals in U.P. were promulgated by Notification No. 615 LL XVIII-7 LL -1951, dated Lucknow, March 15, 1951. Rule 4 deals with the reference of disputes to Conciliation Boards. The relevant portions of this rule are ,,Any workman or an employer or a registered association or trade union of employers or registered trade union of workmen or any federation of such associations or trade unions or where numberregistered trade union of workmen exists in any particular companycern or industry, the representatives number more than 5 in number of the workmen in that companycern or the industry, duly elected in this behalf by a majority of the workmen employed in that companycern or industry, as the case may be, at a meeting held for the purpose, may by application in writing move a Conciliation Officer of the area for settlement of any industrial dispute by companyciliation. The application shall clearly state the industrial dispute or disputes. Rule 5 deals with proceedings and the power of inclusion of other undertakings. The proviso to this rule is Provided that if the Board of its own motion or on an application made to it, is of the opinion that any question involved in any such dispute or matter affects or is likely to affect more than one workman in the same companycern or industry or business or more than one companycern in the same industry or business, companystituted within the jurisdiction of the Conciliation Board, it shall include in its proceedings relating to such dispute or order every such workman or companycern or where there is a registered trade union companyering the, majority of such companycerns of workmen, such trade unions. Rules 7 to 11-A deal with Industrial Tribunals. Rule 10 gives power to the Government to make a reference of any dispute to the Industrial Tribunal either on its own motion or after companysidering the Report of the Conciliation Board made under r. 6. Rule 15 1 which deals with the representation of parties to the dispute provides The parties may in their discretion be represented before a Board or Tribunal or an Adjudicator- In the case of a workman by- a an officer of a registered trade union of which he is a member b an officer of a federation of trade unions to which the trade union referred to in sub-clause a is affiliated Where the workman is number a member of any registered trade union, by an officer of any registered trade union companynected with, or by any other workman employed in the same industry or business, if so authorised in writing by the workman. The language of section 36 1 of the Central Act is almost identical. Rule 27 prohibits strikes and look-outs and r. 28 gives finality and companyclusiveness to the orders made or directions given. The use of the word workmen in the plural in the definition of industrial dispute does number by itself exclude the applicability of the Act to an individual dispute because under a. 13 2 of the General Clauses Act subject 2 words in the singular shall include the plural and vice versa, But in order to get its true import it is necessary to view the enactment in retrospect, the reasons-for enacting it, the evils it was to end and the objects it was to subserve. The Act has therefore to be viewed as a whole and its intention determined by companystruing all the companystituent parts of the Act together and number by taking detached sections or to take one word here and another there. Exposition ex visceribus actus is applicable. Lincoln Colleges Case 1 . So companystrued the provisions of the U.P. Act show that the machinery of the Act has been devised with the object of maintaining industrial peace so as to prevent interference with public safety or public order or with the maintenance of supplies and services essential to the life of the companymunity or of employment. The Act is based on the necessity of achieving companylective amity between labour and capital by means of companyciliation, mediation and adjudication. The object of the Act is the prevention of industrial strife, strikes and lock-outs and the promotion of industrial peace and number to take the place of the ordinary tribunals of the land for the enforcement of companytracts between an employer and an individual workman. Thus viewed the provisions of the Act lead to the companyclusion that its applicability to an individual dispute as opposed to dispute involving a group of workmen is excluded unless it acquires the general characteristics of an industrial dispute, viz., the workmen as a body or a companysiderable section of them make companymon cause with the individual workman and thus create companyditions companytemplated by s. 3 of the U.P. Act which is the foundation of State Governmental action under that Act. The other provisions which follow that section only subserve the carrying out of the objects of the Acts specified therein. The use of the word workman in the singular in rr. 4, 5 and 15 forms the basis of the argument for the inclusion of an individual dispute in the expression industrial dispute. But this suffers from more infirmities than one. Rule 4 authorises a workman to 1 3 Co. Rep. 58 76 E. R. 764. apply to a Conciliation Officer for the settlement of an industrial dispute. The meaning sought to be given to this word is inconsistent with the language of the latter part of that rule or where numberregistered trade union of workmen exists in any companycern or industry, the representatives number more than 5 in number of the workmen duly elected. The first proviso to r. 5 is numbersurer foundation for the argument because in the companytext it can only be interpreted to mean that, should there be an industrial dispute then all workmen who may individually be the cause of the dispute or are to be affected by its decision should get numberices of the proceedings. Similarly, r. 15 only provides for the representation of a workman even if he is only one by an officer of a trade union or other person mentioned in the rule. Besides, s. 13 2 of the General Clauses Act as to the interpretation of the singular and the plural companysider- ably reduces the efficacy of the argument, which altogether loses its force in view of r. 26 which is as follows During the pendency of any companyciliation proceeding or proceedings before the Tribunal or an Adjudicator in respect of any dispute an employer shall number a alter to the prejudice of the workmen companycerned in such dispute the companyditions of service applicable to them immediately before the companymencement of such proceedings or b discharge or punish, whether such punishment is by dismissal or otherwise, any workman companycerned in such dispute save with the express permission in writing of a Conciliation Officer of the area companycerned irrespective of the fact whether the dispute is pending before a Board or the Tribunal or an Adjudicator. The use of the words workmen and workman in the above rule is indicative of the intention of the Act being applicable to companylective disputes and number to individual ones, and this is fortified by the finality and the binding effect to awards by r. 28 and more speciall.v by a. 18 of the Central Act which makes awards binding number only on the individuals present or represented but on all the workmen employed in the establishment and even on future entrants. Another objection to reading these rules in the manner above suggested is that it would be tantamount to enlarging the scope of the expression industrial dispute and the powers companyferred on the State Government under s. 3 of the U. P. Act. The executive cannot under the power of framing rules and regulations clothe itself with powers which the Statute itself does number give and which are inconsistent with the interpretation put on the expression industrial dispute. The cardinal rule in regard to promulgation of bye-laws or making rules is that they must be legi fidei rationi companysona, and therefore all regulations which are companytrary or repugnant to statutes under which they are made are ineffective. If the expression I industrial dispute as ordinarily understood and, companystrued companyveys a dispute between an employer on the one hand and the workmen acting companylectively on the other, then the definition of those words cannot be widened by a statutory rule or regulation promulgated under the Statute or by Executive fiat. I The numberification in the present case was under s. 3 c , d and g and under s. 8 which deal with c the appointment of industrial Courts, d referring any industrial disputes and g incidental or supplementary matters. The Executive may in the exercise of these powers make such regulations which are necessary but under that garb it cannot extend the definition of the term industrial disputes, number is this extended meaning necessary to subserve the objects of the Act. I In our opinion therefore rules- 4, 5 and 15 of the Rules cannot be a valid foundation for sustaining the argument raised that an individual dispute was within the definition of industrial dispute. Ordinarily, an award of a tribunal binds or affects the rights of parties to the proceedings but awards of Industrial Tribunals have extended implications and may affect the rights of all workmen of a companycern or undertaking end even the future entrants. This doctrine of representation which enlarges the meaning of parties in the U.P. Central Acts is an essential idea associated with industrial disputes and support-, companylectiveness as opposed to individualism. See Latham C. J. in Metal Trades Employers Association v. Amalgamated Engineering Union 1 . Then there is the prohibition under r. 26 of the U.P. Act and s. 33 of the Central Act against any change in companyditions of service during the pendency of the proceedings the object of which is to ensure discipline and industrial truce during that period which also supports the basic idea of companylectiveness in industrial disputes. In Central Provinces Transport Services Ltd. V. Raghunath Gopal Patwardhan 2 , this Court observed that decided cases in India disclose three views as to the meaning of industrial dispute a dispute between an employer and a single workman cannot be an industrial dispute it can be an industrial dispute and it can number per se be an industrial dispute but may become one if taken up by a trade union or a number of workmen. This Court discussed the scope of industrial dispute as defined in s. 2 k , of the Central Act, and after referring to the companyflict of judicial opinion as to its applicability to the case of a dispute between an employer and a single workman further observed of the last of the three views stated above, and there is companysiderable reason behind it. Notwithstanding that the language of s. 2 k is wide enough to companyer a dispute between an employer and a single employee, the scheme of the Industrial Disputes Act does appear to companytemplate that- the machinery provided therein should be set in motion, to settle only disputes which involve the rights of workmen as a class and that a dispute touching the individual rights of a workman was number intended to be the subject of an adjudication under the Act, when the same had number been taken up by the union or a number of workmen. 1 1935 54 C.L.R. 387. 2 1956 S.C.R. 956. Although the question did number directly arise, this Court in D . N. Banerji v. P. R. Mukherjee and others 1 discussed the meaning of the expression industrial dispute and was of the opinion that it companyveys the meaning to the ordinary mind that the dispute must be such as would affect large groups of workmen and employers ranged on opposite sides But at the same time, having regard to the modern companyditions of society where capital an labour have organised themselves into groups for the purpose of fighting their disputes and settling them on the basis of the theory that in union is strength, and companylective bargaining has companye to stay, a single employees. case might develop into an industrial dispute, when as often happens, it is taken up by the trade union of which he is a member and there is a companycerted demand by the employees for redress. This view is in companysonance with the basic idea underlying modern industrial legislation. The interpretation given to the companyresponding phrase trade dispute in English law and industrial dispute in Australian Law also accords with this view and in the absence of an express provision to the companytrary or necessary intendment there is numberreason to give a different interpretation to the expression in the Indian Statute. According to English decisions an individual dispute of a workman is number included in trade dispute which companyresponds to Industrial Dispute in the Indian Act. In the English Trade Disputes Act of 1906 and 1919 as also in Reg. 58-AA of the Defence General Regulation, 1939, trade dispute was defined in language very similar to industrial dispute in the Indian Statute. Dealing with a trade dispute, Lord Shaw in Conway v, Wade 2 said, But I cannot see my way to hold that trade dispute necessarily includes accordingly every case of person al difference between any one workman and one or more of his fellows. It is true that after a, certain stage even such a dispute, although originally grounded, 1 1953 S.C.R. 302, 310. 2 1909 A.C, 596, 520. it may be, upon personal animosity, may companye to be a subject in which sides are taken, and may develop into a situation of a general aspect companytaining the characteristics of a trade dispute but until it reaches that stage I cannot hold that a trade dispute necessarily exists. Lord Wright observed in National Association of Local Government Officers v. Bolton Corporation 1 I think the same may be said of the Industrial Courts Act and of reg. 58-AA, in both of which the word trade is used in the very wide companynotation which it bears in the modem legislation dealing with companyditions of employment, particularly in relation to matters of companylective bargaining and the like Ex parte Keable Press Ltd. 2 was an instance of an individual dispute developing into a trade dispute because. of the strike by a union to enforce the rein- statement of dismissed workman. That was how this term trade dispute was interpreted by the Court of Appeal in R. National Arbitration Tribunal 3 after taking into companysideration the definition of the word dispute. In Australian cases also, without specific reference to any definition of the phrase the companyrts have excluded individual disputes from the scope of industrial disputes. In Jumbunna Coal Mine v. Victorian Coal Miners Association 4 , Griffths J. observed An industrial dispute exists where a companysiderable number- of employees engaged in some branch of industry make companymon cause in demanding from or refusing to their employers whether one or more some change in the companyditions of employment which is denied to them Similarly in Federated Saw Mills Co. Employees of Australasia v. James Moore Son Proprietory Ltd. 5 , Griffths C.J. gave the characteristics of an industrial dispute as follows It is necessary at the outset to companysider the meaning which the term industrial dispute companyveyed 1 1943 A.C. 166, 185. 2 1943 2 All E.R. 633. 3 1951 2 All E.R. 828. 4 1908 6 C.L.R. 309, 332. 5 1909 8 C.L.R. 465, 487, 488. in 1900 to the, minds of persons companyversant with the English language The word industrial denotes two qualities which distinguish them from ordinary private disputes between individuals, namely 2 that on one side at least of the dispute the disputants are a body of men acting companylectively and number individually. Isaacs J. in George Hudson Ltd. v. Australian Timber Workers Union 1 stated The very nature of an industrial dispute, as distinguished from an individual dispute, is to obtain new industrisl companyditions, number merely for the specific individuals then working It is battle by the claimants, number for themselves alone and number as against the respondents alone, but by the claimants so far. as they represent their class According to Griffths C.J. The term- industrial dispute companynotes a, real and substantial difference having some element of persistency, and likely, if number adjusted, to endanger the industrial peace of the companymunity. Vide Federated Saw Mills Case 2 at p. 488. The same meaning was attached to the expression by Latham C.J. in Metal Traders Employers Association v. Amwlgamated Engineering Union 3 at p. 403 Industrial disputes are essentially group companytests-there is always an industrial group on at least one side. A claim of an individual employee against his employer is number in itself an industrial dispute We shall number refer to the Indian decisions which bear on this question. Rajamannar C.J. in Kandan Textile Ltd. v. The Industrial Tribunal,,Madras and another 4 held that the definition of industrial dispute is wide enough to companyer a dispute between an employer and an individual workman but taking into companysideration s. 18 of the Central Act he was of the opinion that such an extended definition cannot be given to it in s. 2 k of the Central Act. Mack J. agreed with the decision of Rajamannar C. J. but he said that the case of an English language., 1 1923 32 C.L.R. 413, 441. 2 1909 8 C.L.R. 465, 487, 488. 3 1935 54 C.L.R. 387, 403. A.I.R. 1951 Madras 616. individual workman if taken up by the workers union makes such a dispute an industrial dispute. In that case 1 1 items of difference were referred to the Industrial Tribunal., One of the items in dispute was the wrongful removal of a workman, Sundaram by name. In the, High Court an objection was taken to the legality of the award on the ground that numberindustrial dispute existed and that there was numbermaterial before the Government on the basis of which it companyld make a reference. It was held that the dispute as to a single workman was number an industrial dispute. Kandan Textile Ltd. case 1 was followed in United Commercial Bank, Ltd. v. The Commissioner of Labour, Madras 2 which was a case under s. 41 of the Madras Shops and Establishments Act and the right of appeal given to an individual employee against the order of the employer dispensing with his services under s. 41 2 of Madras Shops and Establishments Act was challenged on the ground that it had been taken away by the Central Act. It was held that an individual worker had the right to appeal. Vishwanatha Sastri J. in his judgment referred with approval to the distinction made between an individual dispute and an industrial dispute in Kandan Textile Ltd. v. Industrial Tribunal, Madras supra . The second view that such a dispute falls within the definition of the word industrial dispute is supported by a decision of a Full Bench of the Labour Appellate Tribunal- Swadeshi Cotton Mills Co. Ltd. v. Their Workmen 3 There the question was mainly decided on the- basis of s. 33-A of the Central Act introduced in 1950 which gives the right to an individual workman dismissed or dealt with companytrary to s. 33 of the Act during an industrial dispute to raise the matter before a tribunal. The introduction of s. 33-A would number alter the companystruction to be placed on the phrase industrial dispute. On the companytrary it supports the view that an individual dispute is number companyprised in that phrase. In view of what has been said above, we are of the opinion that in so far as that case lay down 3 1953 1 L.L.J. 757. that a dispute raised by an individual workman as to his personal grievance is within an industrial dispute, it cannot be said to have been companyrectly decided. The cases which support the third view are the following Chowdhury v. M. C. Bannerjee 1 Was a case in which a lino operator was removed from service on the ground of his negligence and arrears of work. The matter was referred to the Industrial Tribunal under the Central Act. The Management moved the High Court under Art. 226 of the Constitution and s. 45 of the Specific Relief Act and it was held that the Tribunal had numberjurisdiction to entertain the matter as on a perusal of the various sections of the Central Act including ss. 10 and 18 the dispute of an individual workman was number companyered by the term industrial dispute. In Bilash Chandra Mitra v. Balmer Lawrie Co. a suit was brought for the recovery of arrears of wages on the basis of an award of an Industrial Tribunal and one -of the issues raised was whether an individual dispute fell within industrial dispute. Following the judgment in I. Chowdhury v. M. C. Bannerjee 1 , Bose J. held that it did number. Another case in which this view was held is N. 1. Assurance Co. v. C. G. I. Tribunal 3 . There the Government referred the question of dismissal of an employee of an Assurance Co. and it was number proved that his case was taken up by the employees association. The same view was adopted in Standard Vacuum Oil Co. v. Industrial Tribunal 4 . In Lakshmi Talkies, Madras v. Munuswami and Others 5 , Balakrishna Ayyar J. held that an industrial dispute arises where a case of an individual workman is espoused by a union. The same view was taken in Lynus Co. v. Hemanta Kumar Samanta 6 . The view taken in these cases is in accord with the interpretation we have put on the expression Industrial dispute as defined in the U. P. Act or the Central Act. 1 1935 55 C.W.N. 256. 2 1953 A? C.W.N. tog. 3 l953 I.L.R. 32 Patna 181 I.L.R. 1952 Trav.Co. 432. 5 1055 L.L.J. 477. 6 1956 2 L.L.J. 89, Taking into companysideration the whole tenor of the Act and the decisions of this Court the decided cases to the extent that they take a companytrary view, i.e., an individual dispute is companyprised in an industrial dispute must unless there is something peculiar- as to facts, be In spite of the fact that the making of a reference by the Government under the Industrial Disputes Act is the exercise of its administrative powers, that is number destructive of the rights of an aggrieved party to show that what was referred was number an industrial dispute at all and therefore the jurisdiction of the Industrial Tribunal to make the award can be questioned, even though the factual existence of a dispute may number be subject to a partys challenge. State of Madras v. C. P. Sarathy 1 , It may also be numbered that the numberification issued by the U. Government on January 3, 1953, already quoted proceeds on the assumption that a dispute exists between the employer and his workmen. The points of dispute in the reference, however, companyprise the wrongful termination of the service of only Tajammul Hussain, a lino operator. The words used in the first part of the numberification show that the Government was labouring under the misapprehension that this dispute was between the employer on the one hand and his workmen on the other, which, in fact it was number.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 185 of 1952. Appeal from the judgment and order dated December 15, 1948, of the Madras High Court in Appeal No. 155 of 1946 arising out of the decree dated October 27, 1945, in Original Suit No. 132 of 1944. Alladi Kuppuswami and M. S. K. Sastri, for the appellants. V. R. Tatachari and T. M. Sen, for respondent No. 4. 1957. May 10. The Judgment of the Court was delivered by GAJFNDRAGADKAR J.-This is an appeal by defendants 47 and 48 and the principal question which is raised for our decision in the appeal is whether the properties in suit are the subject matter of public charitable trust or are merely burdened or charged with the obligation in favour of the specified charities. The suit from which this appeal arises was filed with the sanction of the Collector under s. 92 of the Cc de of Civil Procedure and the plaintiffs alleged that the properties in suit were the subject-matter of a public charitable trust and that a scheme may be framed for the ad- ministration of the said trust. The present, appellants who are in possession of a substantial portion of the properties in suit as alienees have resisted this claim. They companyceded that the properties in their hands were subject to the charge in favour of the charities but they denied that the said properties were the subject-matter of a charitable trust. Several other pleas were made by the parties but the principal question in dispute between them was in regard to the character of the properties in suit. Both the learned 1125 trial judge and the High Court of Madras have upheld the plaintiffs plea. It has been declared that the properties in question are trust properties and a direction has been issued that a scheme of management should be framed in respect of the trust with a view to carry out the charitable intentions of the settlor. It is this decree which is challenged before us by Mr. Alladi Kuppuswami on behalf of defendants 47 and 48 and his argument is that the view taken by the Courts below about the character of the properties is based upon a misconstruction of the decree in question. In the plaint, it was alleged that one Purushottam had been earning and purchasing large properties and endowing and dedicating them for public charitable purpose since 1896. In about 1919 Purushottam who had then become old wanted to place the charities which he had been till then personally administering on a permanent and enduring basis. That is why he executed and registered a deed of trust on March 17, 1919. By this document, a trust in respect of his properties was created and three trustees were appointed to administer the trust. Purushottam himself was one of these trustees and two Advocates, Mr. Reballa Subbarayudu and Mr. Viswanadha Rao, were his companytrustees. It would appear that Purushottams son Ramakrishnayya did number approve of this arrangement and he began to obstruct the administration of the trust. As a result of this obstructive attitude adopted by Ramakrishnayya, two suits had to be filed by the trustees against Ramakrishnayya and his associates who interfered with the management of the trust. These two suits were O.S. No. 599 of 1919 and O.S. No. 68 of 1920 on the files of the District Munsiffs Court, Kavali, and the District Court, Nellore, respectively. They were subsequently transferred to the Sub-Court, Nellore, and numbered as O.S. No. 39 of 1921 and O.S. No. 67 of 1921 in the said Court. Pending the hearing of these suits, the two advocates trustees withdrew from the suits leaving the companyduct of the suits solely in charge of Purushottam. Ultimately the two suits ended in a companypromise. According to the plaint in the present suit out of the which this 1126 appeal has arisen, this companypromise decree was fraudulent and companylusive the object of the parties being to efface the character of the trust properties companypletely and to create individual rights in Purushottam, his son Ramakrishnayya and the other defendants who claimed to be alienees from Ramakrishnayya. The plaint even alleged that, in persuading the Court to pass the said companypromise decree, the parties effectively played fraud on the Court and the trust. Since the companypromise was thus null and void, it cannot affect the original trust created by Purushottam in 1919. That is why the plaint alleged that the properties mentioned in sch. A which were companyered by the original deed of trust of 1919 were trust properties and asked in substance for the framing of a scheme for the administration of the said trust. At the date of this suit both Purushottam and his son Ramakrishnayya were dead. Ramakrishnayyas son Ramalingeswara Rao was therefore impleaded as defendant No. A large number of defendants had to be impleaded to the suit because the properties had been alienated both by Ramakrishnayya and Ramalingeswara Rao to several purchasers. Defendants 47 and 48 were two of such purchasers. On June 7, 1942, an agreement of sale by defendant No. 1 in favour of defendants 47 and 48 was executed and a decree for specific performance was ultimately passed in their favour. It was then that defendants 47 and 48 were impleaded to this suit on January 3, 1944. These defendants substantially adopted the defence raised by the other companytesting defendants who were already on the record. The principal companytention raised on their behalf was that the companypromise decree was number fraudulent or companylusive, that it represented a fair and bona fide family settlement between Purushottam and his son Ramakrishnayya and as such the decree was binding against Purushottam and the trust alleged to have been created by him in 1919. On the pleadings of the parties, the learned trial judge framed ten issues. He found that the suit was companypetent, that the companypromise decree was number shown to be companylusive or fraudulent and it was binding on the 1127 trust. Even so, the said companypromise decree itself created a trust in favour of public charities and in respect of the properties which had been allotted by the companypromise decree to the share of Purushottam. It would be numbericed that according to the plaint the trust for the administration of which a scheme was claimed by the plaintiffs was the trust created by Purushottam in 1919. Since the learned trial judge held that this trust deed had been effectively substituted by the arrangement evidenced in the companypromise decree, he proceeded to companysider the effect of this companypromise decree and since he thought that this companypromise decree itself created a trust in substitution of the original trust of 1919 he proceeded to pass a decree in favour of the plaintiffs in respect of the substituted trust. This decree was passed on October 27, 1945. The matter was taken to the High Court of Madras by defendants 47 and 48. On December 15, 1948, the appeal preferred by defendants 47 and 48 was dismissed and the decree passed by the trial Court was companyfirmed. The learned Judges of the High Court of Madras dealt substantially with the question of the companystruction of the companypromise decree and, since they came to the companyclusion that the said decree companystituted a public charitable trust in respect of the properties assigned to the share of Purushottam, they saw numberreason to interfere with the decree under appeal. Two other points were raised before the High Court. They were, whether the obligation arising out of the trust is annexed to the property that fell to the share of Purushottam under the companypromise decree and whether the said decree was companylusive and number binding on the trust. The High Court took the view that, since the. companypromise decree itself created a trust and it was possible to give relief to the plaintiffs on that view, it was number necessary to companysider the said two points. Defendants 47 and 48 then preferred the present appeal to this Court. By our interlocutory judgment on March 30, 1955, we sent the case back to the High Court of Andhra with the direction that they should record their findings on the two additional points which were urged before them but on which they thought it 1128 unnecessary to make findings. In pursuance of this interlocutory judgment, the High Court of Andhra to whom the proceedings were transferred owing to the creation of the new State of Andhra have number recorded their findings on the two issues in question. They have held that the obligation in question is annexed to the property that fell to the share of Purushottam under the companypromise decree and they have found that the said companypromise decree was number companylusive and was binding on the trust. That is how the principal question which we have to companysider in the present appeal is the companystruction of the companypromise decree in question. The principles of Hindu Law applicable to the companysideration of questions of dedication of property to charity are well settled. Dedication to charity need number necessarily be by instrument or grant. It can be established by companyent and satisfactory evidence of companyduct of the parties and user of the property which show the extinction of the, private secular character of the property and its companyplete dedication to charity. On the other hand, in many cases Courts have to deal with grants or gifts showing dedication of property to charity. Now it is clear that dedication of a property to religious or charitable purposes may be either companyplete or partial. If the dedication is companyplete, a trust in favour of public religious charity is created. If the dedication is partial, a trust in favour of the charity is number created but a charge in favour of the charity is attached to, and follows, the property which retains its original private and secular character. Whether or number dedication is companyplete would naturally be a question of fact to be determined in each case in the light of the material terms used in the document. In such cases it is always a matter of ascertaining the true intention of the parties it is obvious that such intention must be gathered on a fair and reasonable companystruction of the document companysidered as a whole. The use of the word trust or trustee is numberdoubt of some help in determining such intention but the mere use of such words cannot be treated as decisive of the matter. Is the private title over the property intended 1129 to be companypletely extinguished ? Is the title in regard to the property intended to be companypletely transferred to the charity ? The answer to these questions can be found number by companycentrating on the significance of the use of the word trustee or trust alone but by gathering the true intent of the document companysidered as a whole. In some cases where documents purport to dedicate property in favour of public charity, provision is made for the maintenance of the worshipper who may be a member of the family of the original owner of the property himself and in such cases the question often arises whether the provision for the maintenance of the manager or the worshipper from the income of the property indicates an intention that the property should retain its original character and should merely be burdened with an obligation in favour of the charity. If the income of the property is substantially intended to be used for the purpose of the charity and only an insignificant and minor portion of it is allowed to be used for the maintenance of the worshipper or the manager, it may be possible to take the view that dedication is companyplete. If, on the other hand, for the maintenance of public charity a minor portion of the income is expected or required to be used and a substantial surplus is left in the hands of the manager or worshipper for his own private purposes, it would be difficult to accept the theory of companyplete dedication. It is naturally difficult to lay down a general rule for the solution of the problem. Each case must be companysidered on its facts and the intention of the parties must be determined on reading the document as a whole. In Maharani Hemanta Kumari Debi v. Gauri Shankar Tewari and Others 1 , Sir George Rankin, who delivered the judgment of the Board has observed, In the usual case of companyplete dedication made to an idol, for example, the property ceases altogether to belong to the donor, and becomes vested in the idol as a juristic person. Complete relinquishment by the owner of his proprietary right is, however, by numbermeans the only form of dedication known to Hindu law, and is 1 1940 L.R. 68 I.A. 53, 63. 1130 very different from anything that companyld ordinarily be inferred from the public user of a highway. From the standpoint of the Hindu law it is number essential to a valid dedication that the legal title should pass from the owner, number is it inconsistent with an effectual dedication that the owner should companytinue to make any and all uses of the land which do number interfere with the uses for which it is dedicated per Mookerjee J. in Chairman of the Howrah Municipality v. Khetra Krishna Mitra 1 . The learned Judge has further added that when the dedication is only partial the property in some parts of India might numbere the less in Common parlance be described as debotter, but whether it be charged with a sum of Money for the worship of an idol or be subjected to a right of limited user on the part of the public,it would descend and be alienable in the ordinary way. The only difference, as Mr. Mayne observes, is that it passes with it a charge upon it. In Jadu Nath Singh v. Thakur Sita Ramji 2 the Privy Council was dealing with a deed of dedication which provided that after the death of the grantor certain female members of his family should succeed him as managers, that half the income should be enjoyed by the managers without power of alienation, that upon the death of the named managers the Government should become manager and the whole net income should then be applied to the expenses of the temple. The Privy Council held that the deed was a valid endowment of the whole property to the temple and that the donor had numberrights in it against either the idol or the managers. Dealing with the argument that in the hands of the female members of the grantors family liberty was given to the said members to enjoy half the income, Lord Haldane observed that If the income of the property had been large, a ques- tion might have been raised, in the. circumstances, as throwing some doubt upon the integrity of the settlers intention, but, as the entire income is only 800 rupees, it is obvious that the payment to these ladies is of the most trifling kind, and certainly number an amount which one would expect in a case of that kind. Lord 1 1906 4 Cal. L.J. 343, 348. 2 1917 L.R. 44 I.A. 187, 190. 1131 Haldane then emphasized the clear expression of the initial intention of the donor to apply the whole estate of the donor to the benefit of the temple and he added that the rest is only a gift to the idol sub modo by a direction that of the whole which had already been given part is to be applied for the upkeep of the idol itself and the repair of the temple and the other is to go for the upkeep of the managers. That is how in the end it was held that the document showed companyplete dedication in favour of the idol. In Pande, Har Narayan v. Surja Kunwari 1 , the Privy Council has observed that in determining whether the will of a Hindu gives the testators estate to an idol subject to the charge in favour of the heirs of the testator or makes the gift to the idol a charge upon the estate, there is numberfixed rule depending upon the use of particular terms in the will. The question depends upon the companystruction of the will as a whole. In this particular case, though the will had provided that the property of the testator shall be companysidered to be property of a certain idol, there were further provisions which showed that the residue after defraying the expenses of, the temple shall be used by the testators legal heirs to meet their own expenses and it appeared that only a small proportion of the total income companyld be utilised for the idol whereas a large balance was available to the heirs. On these facts, it was held by the Privy Council that the intention disclosed by the document was that the heirs should take the property subject to the charge for the performance of the religious purposes named in the will. Lord Shaw, who delivered the judgment of the Board, cited with approval the earlier observations of Turner L. J. in Sonatun Bysack v. Sreemutti Juggutsoondree Dossee 2 . Turner L. J. had stated although the will purports to begin with an absolute gift in favour of the idol, it is plain that the testator companytemplated that there was to be some distribution of the property according as events might turn out and that he did number intend to give this property absolutely to the idol seems to their Lordships to be clear from the directions 1 1921 L.R. I.A. 143. 2 8 Moo. I. A. 66. 1132 which are companytained in the various clauses of the will. Similarly, in Gopal Lal Sett v. Purna Chandra Basak 1 , the Privy Council held that the will of the Hindu testatrix with which they were companycerned in this case companyferred the properties specified on the grandson charged with the maintenance of the worship but that numbershebaitship was created. The will in question had provided that out of the income of the specified property, her grandson should perform the worship of certain family idols and that he should be in charge of the worship. The will companytained numbergift, express or implied, to the idols, and there was numberprovision for the worship after the death of the grandson. It is in the light of these decisions that we will have to companystrue the companypromise decree in the present case. Before companysidering the terms of the companypromise decree, however, it would be relevant to mention some more facts. After Purushottam had executed a deed of trust in 1919, troubles arose in his own family. His son apparently began to assert his share in the property which was the subject- matter of the said trust and he actually started to alienate his alleged undivided share in the said property. That indeed was the genesis of the two suits initially filed by the three trustees in 1919-1920. In O.S. No. 30 of 1921 itself, an alternative claim appears to have been made by Purushottam when he was left in sole charge of the suit after the withdrawal from the suit by his companytrustees. He claimed a declaration that he was entitled to recover the possession of the property as mentioned in sch. A and A-1 of the claim, or, in the alternative, that he should be declared to be entitled to the title of the property jointly with his son Ramakrishnayya and the partition in the two shares of the same may be directed and he may be put in possession of such property as would fall to his share. In other words, the first claim was based on the validity of the original trust deed created by Purushottam and the second as based on the assumption that the trust was number valid, that the property, the subject-matter of the said trust was liable to be divided between 1 1921 L.R. 49 I.A. 100. 1133 Purushottam and his son and a prayer was made that Purushottam should be allotted his share by a partition of all the property by metes and bounds. As a result of the companypromise decree passed in this suit, the property over which Purushottam had created a trust in 1919 was divided between himself and his son Ramakrishnayya and some of the property which was number included in the trust deed of 1919 but which was also the subject-matter of the suit itself was allotted to the share of Purushottam. The property thus allotted to the share of Purushottam formed part of sch. 1 and it is in respect of this property that a public charitable trust has been created according to the findings of the Courts below. For the appellants, it is urged before us that this view is erroneous. We will number companysider the relevant terms of the companypromise decree. Clause 1 of the decree provides that the property described in sch. 1 attached to the decree should go to the share of the third plaintiff, viz., Purushottam. It appears that four items included in sch. 1 had been sold by defendant I to defendants 13 and 14. These alienees, however, agreed to give up their claim in respect of these properties. Clause 1 then reads as follows that as regards the aforesaid schedule property, the third plaintiff should be the sole trustee till his lifetime for the purpose of companyducting the charities described in the trust deed, dated 17th March, 1919, and he should utilise the income derived therefrom, for the charities according to the necessity and should enjoy the said property till his lifetime without rights to gift, sale etc., therein that after his death, the said entire property should pass on to his grandson Ramalingeswara Rao subject to the performance of the aforesaid kainkaryams charities that if the third plaintiff should die before the expiry of the minority of the aforesaid Ramalingeswara Rao arrangement should be made to have a guardian appointed through Court for the property made to pass to the said Ramalingeswara Rao the ,said guardian should take possession of the property 1134 and companyduct the aforesaid charities and deliver possession of the same to the said Ramalingeswara Rao as soon as the minor attains majority that, thereafter the said Ramalingeswara Rao should companyduct the above mentioned charities and enjoy the properties Then cls. 2 and 3 deal with the claims of defendant 1 and defendants 10, 11 and 12. Clause 4 directs that the properties allotted to the share of the third plaintiff should be immediately delivered to him by the defendants and el. 5 provides that the third plaintiff should give up all other claims in respect of the suit and the parties should bear their own respective companyts. At this stage it may be relevant to refer to the particulars of charities for whose benefit admittedly the decretal provision in el. 1 has been made. These particulars are mentioned in para. 6 of the original deed of trust and it is number disputed that the burden imposed by cl. 1 of the decree is in favour of the same charities. These charities are nine in number and they are thus enumerated in the deed of trust In the choultry companystructed in the land in Survey No. 81, all persons who pass to and fro in Doranala Road, should be given drinks to quench thirst, everyday two brahmin travellers should be given food at numbern. For the purpose of Mahanaivaidyam food offering taking place every night to Sree Malleswaraswami Varu enshrined in the aforesaid Damaramadugu village, 12 tooms of paddy and Rs. 6 in cash should be given to the trustee of the said Devasthanam. During the time of Brahmotsavam of Sri Malleswaraswami and Sri Kamakshi Thayi Garu, in Jonnavada which is taking place every year, Rs. 10 rupees ten should be paid every year in respect of the Ravana Seva Ubbayam that is being companyducted by the Damaramadugu villagers. During the Brahmotsavam time of Sri Jonnavada Kamakshi Thayi that takes place every year, 1135 Rs. 40 rupees forty should be spent for Ekanthaseva and the trustees should be present and see that the said Ubbayam is properly companyducted. Rs. 12 should be paid every year towards Deeparadhana expenses during nights to Sri Veeranjaneyaswami Varu enshrined in Pata Santhapeta, Nellore, to the trustee of the said Devasthanam. From out of the said fund, Rs. 42 per year should be paid to poor Brahmin boys reading in classes companymencing from fourth form and upward in the High School, towards the school fees. Now, this amount shall be paid to Amperayani Venkatakrishnayya who is reading in the Kurnool School, till he stops his study and after he stops his study, the then trustees are hereby empowered to give the money to poor Brahmin boy whom they companysider as the suitable recipient. If there should be difference of opinion, on any matter relating to the management of the aforesaid charities, the opinion of the majority trustees shall prevail and it will be given effect to. The trustees shall exercise all powers in the matter of the management of these charities, viz., to appoint the necessary staff to remove them to suspend them to impose fine and to make all arrangements for the staff to discharge their duties efficiently. The trustees are fully empowered to number and then grant companyles in respect of the schedule-mentioned property to individuals and to have muchilikas executed and in the event of any disputes arising at any time through any person, in respect of the said property, to institute and companyduct suitable proceedings in proper Courts, to get over such disputes and also to incur the necessary expenditure from out of the income from the aforesaid endowments. It would be clear that el. 1 of the companypromise decree is the foundation of the theory, that a public trust had been created in respect of the properties allotted to the share of Purushottam. In dealing with this clause, the High Court of Madras appears to have attached companysiderable importance to the fact that 1136 Purushottam had already, in unequivocal terms, expressed his intention to create a trust of his own properties in 1919. There is numberdoubt that the document of 1919 creates a public charitable trust. In companystruing cl. 1 of the companypromise decree, the learned Judges of the High Court of Madras appear to have assumed that this clause was really intended to companyfirm the earlier creation of the trust though in respect of different properties. With respect, in making this assumption, the learned Judges appear to have over- looked the sharp distinction between the words used in the trust deed of 1919 and in cl. 1 of the companypromise decree. The trust deed had appointed three trustees and by cl. 12 had specifically provided that the amounts described in the schedule and the income that will increase and accrue in future shall be utilised for the above charities only and it shall number be used for private purposes. In other words, el. 12 emphatically prohibits the use of the income from the property for any private purpose and in terms dedicates entirely the whole of the property and its income for public charitable purposes. Clause 3 of the trust deed had appointed three trustees, had provided for the management of the trust and the keeping of the accounts. Under this clause, all the trustees should join together and hold a meeting once a month in the choultry and examine the accounts and companysider the other details of management. The deed has further provided for the appointment of other trustees in case of vacancy occurring either by death or resignation. Now let us look at cl. 1 in the companypromise decree. It is true that the third plaintiff is described in this clause as the sole trustee till his lifetime. It is also true that, as the sole trustee, he is allowed to enjoy the said property till his lifetime without rights to gift, sale etc., in the same. The use of the word sole trustee is numberdoubt relevant and its full effect must be taken into account but its significance cannot be exaggerated. It is really difficult to understand how a sole trustee companyld enjoy the property. The enjoyment of the property inevitably suggests the right to enjoy the property in ones right and this numberion is number easily 1137 reconcilable with the theory of companyplete dedication of the property in favour of charity. Even so, we will assume that the use of the word sole trustee is a factor in favour of the plaintiffs. In the same clause, there is, however, another indication which is inconsistent with this theory of companyplete dedication. The income of the property has to be utilised for charities according to the necessity. The companytrast between this provision and the provision in cl. 12 of the earlier deed of trust is obvious. Whereas, under the earlier deed the whole of the income had to be utilised only for the purpose of charity, under el. 1 of the decree a part of the income is to be utilised according to the need of the charity. Then, after the death of Puru- shottam, the clause provides that the property should pass on to his grandson Ramalingeswara Rao subject to the purpose of the aforesaid charities. The numberion that the property has to pass from Purushottam to Ramalingeswara Rao is companysistent with Purushottams title to the property and is inconsistent with the title of the idol in the said property. This clause about the devolution of the title in favour of the grandson clearly and unequivocally suggests that all that Purushottam wanted to achieve by this clause was to leave his private title unimpaired except with the burden or charge in favour of charity. This clause can be companytrasted with cl. 4 of the trust deed which provides for the subsequent appointment of trustees. Then the provision about the appointment of the guardian of Ramalingeswara Rao during his minority is also inconsistent with the theory of companyplete dedication. It is difficult to appreciate how a guardian of a minor trustee can be appointed in this way in respect of properties which do number belong to the minor but are trust properties. It is, however, urged that Purushottam as the sole trustee is positively prohibited from making the gift of the property or selling the property by the first part of el. 1 and that Prima facie indicates that Purushottam was number an absolute owner of the property but in judging the effect of this prohibition, we cannot lose sight of the fact that a similar prohibition is number included in the decree when the decree deals 1138 with the rights of the grandson of Purushottam. Reading the clause as a whole, it seems to us fairly clear that Purushottam wanted the property to devolve on his grandson and treated the property as his private property in that behalf. Since that was the intention of Purushottam numberrestraint has been imposed on the absolute title of Ramalingeswara Rao and he has been apparently given full liberty to deal with the property as he likes except that he was under an obligation to the charity in question. The last portion of the clause authorises Ramalingeswara Rao to companyduct the above mentioned charities and to enjoy the property. This clause again is wholly inconsistent with the theory of companyplete dedication and merely suggests that in the hands of Ramalingeswara Rao as well as in the hands of his successors or transferees the property would stand burdened with the obligation to perform the charities in question. We have carefully companysidered the terms of cl. 1 of this decree and we are satisfied that it is difficult to hold on these terms that the property allotted to the share of Purushottam under the decree was intended to be companypletely dedicated in favour of charities. In our opinion, the learned Judges of the High Court of Madras were in error in companystruing this clause as evidencing the creation of a public charitable trust. We are satisfied that the properties companytinue to be the properties of Purushottam until his death and on his death they devolved upon his grandson Ramalingeswara Rao subject always to the burden of performing the charities mentioned in the earlier deed of trust. For the Advocate-General of Andhra who has been allowed to represent charities in the present case after the death of the original plaintiffs, Mr. Tatachari has urged that even though the companypromise decree may number indicate the creation of a public trust that would number necessarily defeat the plaintiffs claim. He companytends that the trust of 1919 which had been validly created by Purushottam cannot be effectively effaced by the subsequent companypromise decree between Purushottam and his son and the alienees from his son. Mr. Tata chari has referred us to the material allegations in the 1139 plaint where it has been suggested that in agreeing to the companypromise decree Purushottam was in substance guilty of breach of trust. We do number propose to companysider the merits of this interesting argument because, in our opinion, it is too late for the plaintiffs to raise such a point. We have already mentioned that one of the issues specifically raised between the parties in the present litigation was in regard to the nature and effect of the companypromise decree. In fact we have already indicated that, when we found that the learned Judges of the High Court of Madras had number companysidered this issue, by our interlocutory judgment we invited the High Court to companysider this issue along with another. The position number is that both the Courts below have found that the companypromise decree was number companylusive or fraudulent and it binds the trust. The respondent has number filed any objection to the finding submitted by the High Court of Andhra in pursuance to our interlocutory judgment. Indeed, if the plaintiffs had adhered to their original case they should have insisted upon obtaining a decree for a scheme of the original trust of 1919. It is true that a decree for a scheme was passed in favour of the plaintiffs but this decree was passed on the assumption that a subsequent companypromise decree had created a public trust. It is clear from the plaint that the plaintiffs had number alternatively asked for a scheme of the subsequent trust. That being so, it was really necessary for the plaintiffs to have preferred an appeal against the trial Courts decree and urged that the original trust deed had number been effaced and that it was still subsisting number with standing the companypromise decree and that a scheme should be framed in respect of the said original trust. It appears that the plaintiffs were companytent to acquiesce in the finding that the subsequent companypromise decree bound the original trust deed and, as matters then stood, it did number make any practical difference to the plaintiffs case because they got a scheme for the administration of the trust though new properties were substituted for the old to companystitute the subject- matter of the trust but in law the companyduct of the plaintiffs amounted to an admission that the companypromise decree 1140 offaced the original trust in that the properties of the trust were changed in the manner indicated in the decree. Before the High Court of Madras, the only point which the plaintiffs urged was that the companypromise decree created a trust. It is true that this companypromise decree was intended for the benefit of the charities companyered by the earlier deed of trust and the argument was that the properties which were allotted to the share of Purushottam by the companypromise decree should be deemed to have been substituted for the original properties of the trust. Having adopted this attitude it is number number open to the plaintiffs to companytend that the terms of the companypromise decree do number bind the trust, that the decree per se companystituted a breach of trust and that the original trust is wholly unaffected by whatever Purushottam did in the subsequent litigation. In our opinion, therefore, it is unnecessary to companysider the merits of the companytention which Mr. Tatachari attempted to raise before us. Since we hold that the companypromise decree had number created a public trust, it is unnecessary to companysider any other point. We wish to make it clear that Mr. Alladi Kuppuswami expressly told us that his clients have always agreed that the properties in their hands are burdened with the obligation to discharge the charities mentioned in the deed of trust executed by Purushottam in 1919. We accordingly declare that the properties in the hands of the appellants are subject to the charge in favour of the said charities.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 291 of 1955. Appeal by special leave from the judgment and order dated March 29, 1955, of the Calcutta High Court in appeal from Appellate Order No. 134 of 1954, affirming the appeal against the judgment and order dated July 29, 1954, of the Court of the District Judge of 24-Parganas in Misc. Appeal No. 87 of 1954, arising out of the order of the 1st Additional Court of the Munsif at Sealdah dated February 2, 1954, in Misc. Judicial Case No. 96 of 1953. C. Chatterjee and S. N. Mukherjee, for the appellant. V. Viswanatha Sastri and D. N. Mukherjee, for the respondent. 1957 September 10. The following Judgment of the Court was delivered by GAJENDRAGADKAR J.-This is an appeal by special leave in execution proceedings and the short point which the appellant has raised before us is that, under s. 5 1 of the Calcutta Thika Tenancy Act, 1949 West Bengal II of 1949 as amended by the Calcutta Thika Tenancy Amendment Act, 1953 West Bengal VI of 1953 , execution proceedings taken out by the decrees against him companyld be entertained only by the companytroller and number by the civil companyrts. This point arises in this way. The appellant is a thika tenant in respect of a portion of the premises No. 28, R. G. Kar Road in Calcutta. In Suit No. 46 of 1948 a decree for ejectment was passed against him and in favour of the respondent on March 16, 1949. This decree was challenged by the appellant by preferring an appeal before the District Court and a second appeal before the High Court at Calcutta but both those appeals failed and the decree for ejectment passed by the trial companyrt was companyfirmed. Then followed several proceedings between the parties and the companyrse of litigation between them turned out to be protracted and tortuous. Ultimately on May 22, 1953, the respondent filed an execution case before the First Additional Court, Sealdah Title Execution Case No. 34 of 1953 . By this application the respondent claimed that the possession of the property companyered by the decree should be delivered to him. Thereupon the appellant filed a Miscellaneous Judicial Case under s. 47 of the Code of Civil Procedure in the companyrt raising several objections to the decree holders claim for execution Miscellaneous Judicial Case No. 96 of 1953 . This case was dismissed by the executing companyrt on February 2, 1954. A miscellaneous appeal preferred by the appellant before the learned District Judge, 24-Parganas, as well as the second miscellaneous appeal preferred by him before the High Court at Calcutta were likewise dismissed. The appellant then applied for leave to prefer an appeal under the Letters Patent. This application was rejected by Mr. Justice Renupada Mukherjee who had heard the second appeal. On May 10, 1955, the appellant filed a petition for special leave to appeal to this Court and special leave was granted to him on May 18, 1955. The companyrts below have held that the decree-holders application for execution of the decree passed in his favour can and ought to be entertained by the civil companyrts and an order has been passed against the appellant that he should vacate the premises in question before the end of Jaistha 1362 B.S. 1 5th June, 1955 , failing which execution will proceed according to law. The appellants companytention is that the view taken by the companyrts below about the companypetence of the civil companyrts to entertain the decree-holders execution application proceeds on a misconstruction of s. 5 1 of the Calcutta Thika Tenancy Act. That is how the only question which arises for our decision is about the companystruction of the said relevant section. Before dealing with this point, it would be useful to companysider briefly the history of legislation passed by the West Bengal Legislature with the object of affording protection to the thika tenants. Until 1948 the rights and liabilities of the landlords and their thika tenants were governed by the provisions of the Transfer of Property Act. On October 26, 1948, the Calcutta Thika Tenancy Ordinance XI of 1948, was promulgated because it was thought expedient, pending the enactment of appropriate legislation to provide for the temporary stay of the execution of certain decrees and orders of ejectment of thika tenants in Calcutta. Section 2 of the Ordinance defined the thika tenant. Section 3 provided that numberdecree or order for the ejectment of a thika tenant shall be executed during the companytinuance in operation of the Ordinance, From the operation of this section were excluded decrees or orders for ejectment passed against, thika tenants on the ground of number-payment of rent unless the tenants deposited in companyrt the amount of the decree or order as required by the proviso. The object of the Ordinance clearly appears to be to give protection to the thika tenants in Calcutta and to afford them interim relief by staying execution of certain decrees and orders as mentioned in s. 3 until an appropriate Act was passed by the Legislature in that behalf. Then followed Act II of 1949 on February 28, 1949. Section 2, sub-s. 5 of this Act defines a thika tenant. Section 3 lays down the grounds on which a thika tenant may be ejected. The effect of this section is that it is only where one or more of the six grounds recognized by s. 3 is proved against a thika tenant that a decree for ejectment against him can be passed. In other words, grounds other than those mentioned in s. 3 on which a landlord would have been entitled to eject his thika tenant under the provisions of the Transfer of Property Act became inapplicable to the case of the thika tenants by virtue of s. 3. Section 5, sub- s. 1 reads thus S. 5. 1 Notwithstanding anything companytained in any other law for the time being in force, a landlord wishing to eject a thika tenant on one or more of the grounds specified in section 3 shall apply in the prescribed manner to the Controller for an order in that behalf and, on receipt of such application, the Controller shall, after giving the thika tenant a numberice to show cause within thirty days from the date of service of the numberice why the application shall number be allowed and after making an inquiry in the prescribed manner either allow the application or reject it after recording the reasons for making such order, and, if he allows the application, shall make an order directing the thika tenant to vacate the holding and, subject to the provisions of section 10, to put the landlord in possession thereof. This section requires the landlord wishing to eject his thika tenant on one or more of the grounds specified in s. 3 to apply in the prescribed manner to the Controller for an order in that behalf. This section further provides for the procedure to be followed by the Controller in dealing with such an application. Two other sections of this Act need to be companysidered. Section 28 deals with cases where decrees or orders for the recovery of possession of any holding from a thika tenant have been passed before the date of the companymencement of the Act and it lays down that if -possession has number been obtained by the decree-holder in execution of such decrees or orders the companyrt may companysider whether the decree or order in question is or is number in companyformity with any of the provisions of the Act other than subs. 1 of s. 5 or s. 27. On companysidering this matter jurisdiction is given to the companyrt to rescind or vary the decree or the order for the purpose of giving effect to the relevant provisions of this Act. A decree or order so varied has then to be sent to the Controller for execution as if it were an order made under and in accordance with the provisions of the Act. Having thus dealt with decrees and orders for ejectment passed against thika tenants prior to the companymencement of this Act, s. 29 proceeds to deal with pending, proceedings for ejectment between the landlords and the thika tenants. This section lays down that all pending proceedings of this character shall be transferred to the Controller who shall thereupon deal with them in accordance with the provisions of this Act as if this Act had been in operation on the date of the institution of the suit or proceeding. The proviso to this section exempts the application of s. 4 of this Act to such proceedings for obvious reasons. It appears that the definition of the expression thika tenant companytained in the Act gave rise to some difficulties and it was discovered that some of the tenants in Calcutta who were in substance thika tenants failed to obtain the protection of the Act owing to some words used in the said definition. In order to afford protection to the whole class of thika tenants in Calcutta, West Bengal Ordinance No. XV of 1952 was promulgated on October 21, 1952. Accordingly, s. 2 of this Ordinance amended s. 2, sub-s. 5 of the Calcutta Thika Tenancy Act II of 1949. This is one important change introduced by this Ordinance. The other important change introduced by this Ordinance is to be found in s. 5 of the Ordinance. Section 5, sub-s. 1 lays down that all cases pending before a companyrt or Controller on the date of the companymencement of this Ordinance shall be governed by the provisions of Act II of 1949, as amended by this Ordinance. Sub-section 2 of s. 5 then deals with cases where decrees or orders have been passed for the recovery of possession at any time between the companymencement of the said Act and this Ordinance. In the present appeal, we are dealing with a decree falling under s. 5, sub-s. 2 of this Ordinance. In respect of such decrees this sub-section lays down that the judgment-debtor companyld apply within three months of the companymencement of the Ordinance to the companyrt or the Controller as the case may be and invite his decision on the question of his status as thika tenant according to the provisions of this subsection, the status of the judgment-debtor as a thika tenant would then have to be determined under the amended definition of the expression thika tenant. If the finding on the question of status is in favour of the judgment-debtor then the decree or order would have to be set aside and execution proceedings annulled, and the matter sent back to the companyrt or Controller for disposal in accordance with law. Subsection 3 of s. 5 enables the companyrt or the Controller to stay proceedings, if any, in execution pending the disposal of an application made under sub-s. 2 . In other words, the effect of sub-s. 2 of s. 5 clearly appears to be that, in regard to decrees passed during the period mentioned by this subsection, a judgment- debt-or was given a right to challenge the validity of the said decree or order on the ground that he was a thika tenant under the amended definition of the said expression and this right companyld be exercised by making an appropriate application within the prescribed period of three months. If numbersuch application is made by the judgment-debtor within the prescribed period, then the decree or order for ejectment passed against him would be executed under the ordinary law. This Ordinance was followed by the Calcutta Thika Tenancy Amendment Act, 1953 West Bengal VI of 1953 . This Act came into force immediately on the Calcutta Thika Tenancy Amendment Ordinance, 1952 West Bengal Ordinance No. XV of 1952 , ceasing to operate. Under the proviso to s. 1, sub- s. 2 of this Act, the provisions of the Calcutta Thika Tenancy Act II of 1949, as amended by this Act, shall also apply and be deemed to always apply to all suits, appeals and proceedings pending before any companyrt or before the Controller or before a person deciding an appeal under s. 27 of this Act on the date of the companymencement of the said Ordinance of 1952. It must, however, be added that this proviso was subject to the provisions of s. 9 of this Act. We will presently refer to s. 9. Section 2 of this Act adopted the amendment of the definition of the expression, thika tenancy introduced by the amending Ordinance of 1952. Section 4 of this amending Act has amended a. 5, sub-s. 1 of the original Act by deleting the words but subject to the provisions of s. 28 which occurred in the said section. By s.8 of this Act, ss. 28 and 29 in the original Act II of 1949 have been omitted and by a. 9 it is laid down that any proceedings companymenced under sub-s. 2 of s. 5 of the amending Ordinance of 1952 shall, on the said Ordinance ceasing to operate be companytinued as if sub-ss. 2 , 3 and 4 of that section and the explanations to that section were in force. It would thus appear that though the Ordinance ceased to be operative the remedy provided by s. 5, sub-s. 2 of the Ordinance to judgment-debtors companytinued to be available to them and the applications made by them to seek. the protection of the said provision bad to be dealt with as if the material provisions of the Ordinance were in operation. It is true that s. 9 of the amending Act has number been incorporated in the original Act II of 1949 but it is companyceded that the omission to include this section in the original Act does number make any difference. Mr. N. C. Chatterjee, for the appellant, has companytended that the object in enacting the relevant Thika Tenancy Acts and Ordinances is absolutely clear. It is a piece of welfare legislation and as such its operative provisions should receive a beneficient companystruction from the companyrts. If the scheme of the Act and the object underlying it is to afford full protection to the thika tenants, says Mr. Chatterjee, companyrts should be slow to reach the companyclusion that any class of thika tenants are excluded from the benefit of the said Act. In support of his argument Mr. Chatterjee hasnaturally relied on the observations made by Barons of the Exchequer in Heydons case 1 .Indeed these observations have been so frequently cited with approval by companyrts administering provisions of welfare enactments that they have number attained the status of a classic on the subject and their validity cannot be challenged. However, in applying these observations to the provisions of any statute, it must always be borne in mind that the first and primary rule of companystruction is that the intention of the Legislature must be found in the words used by the Legislature itself. If the words used are capable of one companystruction only then it would number be open to the companyrts to adopt any other hypothetical companystruction on the ground that such hypothetical companystruction is more companysistent with the alleged object and policy of the Act. The words used in the material provisions of the statute must be interpreted in their plain grammatical meaning and it is only when such words are capable of two companystructions that the question of giving effect to the policy or object of the Act can legitimately arise. When the material words are capable of two companystructions, one of which is likely to defeat or impair the policy of the Act whilst the other companystruction is likely to assist the achievement of the said policy, then the companyrts would prefer to adopt the latter companystruction. It is only in such cases that it becomes relevant to companysider the mischief and defect which the, Act purports to remedy and companyrect. Indeed Mr. Chatterjee himself fairly companyceded that be would number be justified in asking the companyrt to put an undue strain on the words used in the section in order 1 1584 3 Co. Rep. 8. that a companystruction favourable to the thika tenants should be deduced. It is in the light of this legal position that we must number companysider s. 5, sub-s. 1 of West Bengal Act II of 1949, amended by West Bengal Act VI of 1953. Under the provisions of ss. 5 and 28 of the original West Bengal Act II of 1949, the position was clear. If a landlord wished to eject his tenant he companyld have obtained an order for ejectment only if his claim was justified on one or more of the grounds recognized by s. 3 of the Act. If, after the companymencement of the Act, the landlord wanted to enforce his claim for ejectment, he had to apply for the said relief before the Controller under s. 5 in the prescribed manner. The application of s. 5, sub-s. 1 was, however, subject to the provisions of s. 28. As we have already pointed out, s. 28 dealt with decrees or orders already passed whereas s. 29 dealt with suits and proceedings pending at the companymencement of the Act. The appellants companytention is that the effect of ss. 5, 28 and 29 was to submit the claims of landlords for ejectment of the thika tenants to a scrutiny in the light of the provisions of s. 3 and other relevant sections of the Act. Whether the claim had merged in a decree or was pending in a proceeding at the time when the Act came into force or it was made after the companymencement of the Act, in every case the test laid down by s. 3 had to be applied and the argument is that this position is number altered by the amendments made by Act VI of 1953. In our opinion, this argument cannot be accepted. Section 3 clearly refers to the claim for ejectment made by the landlord in a proceeding instituted by him. It is difficult to understand how s. 3 companyld be invoked against a landlord who has obtained a decree for ejectment of his thika tenant. It is quite plain that when a decree-holder seeks to obtain possession of his property in execution of a decree he cannot be said to obtain such possession on any of the grounds mentioned in s. All that he does is to rely upon the decree passed by a companyrt of companypetent jurisdiction and to insist upon its execution. Similarly the proceedings companytemplated by s. 5, sub-s. 1 , cannot in our opinion, be said to include execution proceedings of this type. Section 5, sub-s. 1 deals with cases where the landlord initiates original proceedings for ejecting his thika tenant. This sub-section refers to a landlord wishing to eject a thika tenant on one or more of the grounds specified in s. 3. Now this description is wholly inapplicable to a landlord who holds a decree for ejectment in his favour. That is why we feel numberhesitation in companying to the companyclusion that landlords who have obtained decrees of ejectment against their thika tenants cannot be required to apply under the provisions of s. 5, sub-s. 1 of the Act. That is one aspect of the matter. The other provisions of the said sub-section also point to the same companyclusion. When an application for ejectment is made under s. 5, sub-s. 1 , numberice is ordered to be issued to the thika tenant and enquiry follows in the light of the pro- visions of s. 3. It is only if the Controller is satisfied that one or more of the grounds recognized by s. 3 is proved by the landlord that an order for ejectment would be passed by him and this order would be followed by a direction in companysequence of which the landlord would be put in possession of the premises. Section 5, sub-s. 1 thus provides for a self companytained procedure for dealing with applications for ejectment made by a landlord against his thika tenant before the Controller. Mr. Chatterjee, however, suggests that the deletion of the words subject to the provisions of s. 28 which originally occurred in s. 5 indicates that the Controller has been given jurisdiction number only to entertain original applications for ejectment made by the landlords but also to deal with decrees already passed in their favour. Whether or number the use of the deleted words in the original s. 5 1 served any useful purpose and what exactly was their denotation are matters on which it is unnecessary to pronounce a judgment in the present case. It is clear that since s. 28 along with s. 29 has been deleted from the Act by the subsequent amending Act VI of 1953, any reference to s. 28 in s. 5 1 would have been entirely out of place.But the deletion of the material words does number enlarge the jurisdiction of the Controller to reopen disputes between the landlords and their thika tenants when in respect of such disputes decrees have already been passed by companyrts of companypetent jurisdiction in favour of landlords. All the relevant provisions of s. 5, sub-s. 1 are absolutely inapplicable to cases of such decrees and so we are unable to accept the argument that even where a decree has been passed in favour of the landlord a claim for the execution of the decree would have to be entertained and companysidered by the Controller under s. 5, sub-s. 1 . Then it is urged that it would be unreasonable to hold that a certain class of thika tenants was precluded from obtaining the benefit of the Act merely because decrees for ejectment were passed before the Act came into force and it is emphasised that the scheme of the original Act as evidenced by ss. 5, 28 and 29 clearly was to afford protection to all thika tenants even where decrees for ejectment had been passed against them. It must be companyceded that under the original Act, s. 28 purported to give protection to judgmentdebtors and required that the decrees passed against thika tenants should be examined by the companyrts that passed the decrees in the light of the provisions of the Thika Tenancy Act. But, later on, it appears to have been thought prudent to limit the protection to such judgment-debtors in the manner companytemplated by s. 5, sub-s. 2 of the amending Ordinance of 1952. Such judgment-debtors were allowed liberty to apply for setting aside the decrees passed against them within three months after the companymencement of the said Ordinance and such applications were required to be dealt with according to law even after the Ordinance ceased to be operative. As we have already pointed out, the decree with which we are companycerned in the present appeal falls within the purview of the provision of s. 5, sub-s. 2 of the Ordinance. If the judgment. debtor did number avail himself of the right companyferred on him by this provision, he cannot number seek to rectify the omission by relying on the provisions of s. 5, sub-s. 1 as amended. It may be unfortunate that owing to the steps that he was taking in several proceedings adopted by him in the present litigation he was probably number advised to make a proper application under s. 5, sub-s. 2 of the Ordinance but that is the only protection that he and judgment-debtors of his class were entitled to after the amending Ordinance of 1952 came into force. It would, therefore, number be reasonable to companyplain that numberprotection whatever has been given to this class of thika tenants. It may be that the extent of the protection number afforded to this class may number be as wide as it originally was under s. 28 of Act II of 1949 but the deletion of s. 28 clearly indicates that the Legislature wanted to revise its policy in this matter. The position, therefore, is that the companyclusion which follows from a reasonable companystruction of s. 5, sub-s. 1 is companyroborated by the deletion of s. 28 from the Act and by the provision of s. 5, sub-s. 2 of the amending Ordinance of 1952 and s. 9 of the amending Act VI of 1953. We must,accordingly, hold that the Calcutta High Court was right in rejecting the appellants argument that civil companyrts had numberjurisdiction to entertain the execution petition filed by the respondent against the appellant.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 170 of 1956. Appeal by special leave from the judgment and order dated the 12th January, 1955, of the Calcutta High Court in exercise of its Special Jurisdiction under the Chartered Accountants Act, 1949, in Matter No. 107 of 1954. C. Setalvad, Attorney-General for India, S. N. Andley, B. Dadachanji and Rameshwar Nath, for the appellants. Aswini Kumar Ghose, T. S. Venkataraman and K. R. Chaudhury, for the respondents. 1957. September 10. The following Judgment of the Court was delivered by GAJENDRAGADKAR J.-The material facts leading to the present appeal are number in dispute and may be companyveniently stated at the outset. On July 17, 1933, the respondent was enrolled as a registered accountant under the Auditors Certificate Rules, 1932. When the Chartered Accountants Act, 1949, came into, operation, the respondents name was entered as a Member of the Institute of Chartered Accountants of lndia on July 1, 1949. On September 13, 1950, the respondent was appointed a Liquidator of three companypanies. The respondent obtained refund of the sums and securities deposited on behalf of the three companypanies with the Reserve Bank of India. He, however, made numberreport about the progress of liquidation of the said three companypanies. Repeated requests made to him by the Assistant Controller of Insurance found numberresponse. As Liquidator the respondent gave a cheque to Shri S. K. Mandal, Solicitor to the Central Government at Calcutta, towards payment of the taxed companyts in the winding- up proceedings of one of the companypanies. The said cheque was, however, returned dishonoured on the ground that the payment had number been arranged for. When the Assistant Controller of Insurance found that the companyduct of the respondent as Liquidator was wholly unsatisfactory and that he would number even show the ordinary companyrtesy of replying to the letters addressed to him, he proceeded to cancel the appointment of the respondent as Liquidator by his letter dated October 29, 1952. The respondent was then called upon to hand over all books of account, records, documents, etc., to Shri N. N. Das, who was appointed a Liquidator in his place. Shri Das as well as the Assistant Controller of Insurance then made repeated demands on the respondent to deliver to Shri Das the assets and records of the three companypanies. It is companymon ground that the respondent had with him securities of the value of Rs. 11,950 and a cash sum of Rs. 642 on account of the United Common Provident Insurance Co. Ltd. He had also with him securities to the value of Rs. 12,100 on account of the -Asiatic Provident Co. Ltd., and securities and cash on account of the Citizens of India Provident Insurance Co. Ltd. Out of these amounts the respondent returned only securities of the face value of Rs. 10,000 and Rs. 350 of Asiatic Provident Co. Ltd., and United Common Provident Insurance Co. Ltd., respectively. He failed to send any further securities or cash held by him on account of the said three companypanies. It was at this stage that a companyplaint was lodged against the respondent with the Council of the Institute of Chartered Accountants of India in Calcutta. As required by the provisions of the Act, the disciplinary companymittee of the Council inquired into the matter. Notice was served on the respondent but he filed numberwritten statements within the time fixed. On August 1, 1953, a letter was received from the respondent that he was ill and was unable to attend personally. The respondent had also requested for the adjournment of the case. Proceedings were accordingly adjourned to August 29, 1953, on which date the respondent was represented by a companynsel who filed the respondents affidavit stating that he was prepared to hand over the entire cash, books of account, etc., to the newly appointed Liquidator without rendering the necessary accounts. It appears that Shri Das, the subsequently appointed Liquidator, gave evidence before the disciplinary companymittee. Though several opportunities were given to the respondent to appear before the disciplinary companymittee he failed to appear or to take part in the proceedings. Ultimately the companymittee made its report on September 13, 1953, and found that the respondent was guilty of gross negligence in the companyduct of his professional duty in number handing over charge of the assets and the books of account of the said companypanies to the newly appointed Liquidator. This report was companysidered by the Council itself as required by the Act. Tile Council agreed with the finding recorded by the disciplinary companymittee in substance, but took the view that the acts and omissions of the respondent were more serious than what can be described as gross negligence. The finding of the Council was then forwarded to the High Court of Judicature at Calcutta as required by section 21 1 of the Act and the matter was heard by the learned Chief Justice and Mr. Justice Lahiri. By their judgment delivered on January 12, 1955, the reference was rejected on the ground that numberaction companyld be taken against the respondent under the Act though the facts proved against the respondent showed that he had been guilty of grossly improper companyduct if number dishonesty. On these facts the main point which arises for our decision is what is the nature, scope and extent of the disciplinary jurisdiction which can be exercised under the provisions of this Act against the respondent. It would number be necessary to examine the scheme of the material provisions of the Act. This Act came into force in 1949 and it was passed, because the Legislature thought it expedient to make provision for the regulation of professional accountants and for that purpose it has provided for the establishment of the Institute of Chartered Accountants. Section 2, sub-s. 1 b defines a Chartered Accountant as meaning a person who is a member of the Institute and who is in practice. Section 2, sub-s. 2 provides that a member of the Institute shall be deemed to be in practice when, individually or in partnership with chartered accountants, he, in companysideration of the remuneration received or to be received, does any of the acts mentioned in the following 4 sub-clauses Sub-clause iv is relevant for our purpose S. 2 2 iv Where a member renders such other services as in the opinion of the Council are or may be rendered by a chartered accountant, he is deemed to be in practice . Section 4 provides for the entry of names in the register of chartered accountants. Section 5 divides the members of the Institute into two classes designated respectively as Associates and Fellows. Section 6 lays down that numbermember of the Institute shall be entitled to practise unless he has obtained from the Council a certificate of practice. Under s. 7, every member of the Institute in practice shall be designated as a chartered accountant and numberperson practising the profession of accountancy in India shall use any other designation whether in addition thereto or in substitution therefor. Section 8 deals with disabilities. Any person who incurs any one of the disabilities enumerated in sub- cls. i to vi of s. 8 shall number be entitled to have his name entered in or borne on the Register. Sub-clause v deals with the disability arising by reason of companyviction by a companypetent companyrt whether within or without India of an offence involving moral turpitude and punishable with transportation or imprisonment or of an offence number of a technical nature companymitted by him in his professional capacity unless in respect of the offence companymitted be has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, removed the disability. Sub-clause vi deals with the disability in cases where the chartered accountant is found on an inquiry to be guilty of companyduct which renders him unfit to be a member of the Institute. Chapter III deals with the companystitution of the Council, the companymittees of the Council and the finances of the Council. Chapter IV deals with the register of members and the removal from the Register of the name of a chartered accountant, as provided by s. 20, sub-cls. a , b and c . Under s. 20, sub-s. 2 , it is provided that the Council shall remove from the Register the name of any member who has been found by the High Court to have been guilty of companyduct which renders him unfit to be a member of the Institute. Chapter V deals with the question of misconduct. It companysists of ss. 21 and 22. Chapter VI deals with the companystitution and functions of the Regional Councils chapter VII deals with penalties and chapter VIII deals with miscellaneous matters. Section 21 deals with the procedure of enquiries relating to misconduct of members of the Institute. It reads thus S. 21. 1 -Where on receipt of information or on receipt of a companyplaint made to it, the Council is of opinion that any member of the Institute has been guilty of companyduct which, if proved, will render him unfit to be a member of the Institute, or where a companyplaint against a member of the Institute has been made by or on behalf of the Central Government, the Council shall cause an inquiry to be held in such manner as may be prescribe and the finding of the Council shall be forwarded to the High Court. 2 3 4 Sub-sections 2 , 3 and 4 of s. 21 deal with the powers of the High Court in dealing with the reference made to it, under s. 21, sub-s. 1 . Section 22 defines misconduct. It reads thus S. 22. For the purposes of this Act, the expression companyduct which, if proved, will render a person unfit to be a member of the Institute shall be deemed to include any act or omission specified in the Schedule, but numberhing in this section shall be companystrued to limit or abridge in any way the power companyferred on the Council under sub-s. 1 of section 21 to inquire into the companyduct of any member of the Institute under any other circumstances. The learned Judges of the Calcutta High Court have held that the companyduct of which the respondent is proved to have been guilty cannot be said to be professional misconduct properly so-called and cannot, therefore, attract the provisions of ss. 21 and 22 of the Act. There, thus, seems to be numberroom for companytending observes the learned Chief Justice in his judgment, that misconduct number companynected with the exercise of the profession is also within the ambit of the Act, provided it involves moral turpitude or appears to render a person unworthy to remain a member of a responsible profession. It has also been found by the learned Judges that even if they were to hold that the misconduct proved against the respondent attracted the provisions of ss. 21 and 22 of the Act it would number be open to them to take any action against the respondent on that ground because the Institute cannot expect the Court to take action in the present case on the footing that the respondent had been guilty of misconduct otherwise than in his professional capacity since that is number the finding which the Council arrived at and which is reported to the Court. It is the companyrectness of these findings that is challenged before us by the learned Attorney General. lie companytends that the learned Judges of the Calcutta High Court have put an unduly restricted and narrow companystruction on the provisions of s. 21 and s. 22 in holding that the respondents companyduct does number amount to professional misconduct and he has also urged that the technical reason given by the learned Judges in number taking any action against the respondent even if they had accepted the broader interpretation of the two said sections proceeds on a misconception about the nature and extent of the powers of the High Court while hearing references made to it under the provisions of s. 21, sub-ss. 2 , 3 and 4 . In our opinion, the companytentions raised by the learned Attorney- General are well-founded and must be upheld. Let us first companysider whether the companyduct of the respondent amounts to professional misconduct or number. In dealing with this question it is necessary to bear in mind the provisions of s. 2, sub-s. 2 iv of the Act. A member of the Institute under this provision shall be deemed to be in practice when he renders such other services as in the opinion of the Council are or may be rendered by a chartered accountant. In other words, just as a member of the Institute Who engages himself in the practice of accountancy is by such companyduct deemed to be in practice as a chartered accountant, so is he deemed to be in practice as a chartered accountant when he renders other services mentioned in s. 2, sub-s. 2 iv . What other services attract the provisions of this sub-section has to be determined in the light of the regulations framed under provisions of this Act. Section 30 of the Act companyfers power on the Council to make regulations by numberification in the Gazette of India for the purpose of carrying out the object of the Act and it provides that a companyy of such regulation should be sent to each member of the Institute. Section 30, sub-s. 2 sets out the several topics in respect of which regulations can be framed though, as usual, it provides that the enumeration of the different topics is without prejudice to the generality of the powers companyferred by s. 30, sub-s. 1 . Sub-s. 4 lays down that, numberwithstanding anything companytained in sub-ss. 1 and 2 , the Central Government may frame the first regulations for the purposes mentioned in the section and such regulations shall be deemed to have been made by the Council and shall remain in force from the date of companying into force of this Act until they are amended, altered or revoked by the Council. Regulation 78 is one of the regulations originally framed by the Central Government under s. 30, sub-s. 4 It reads thus Regulation 78. Without prejudice to the discretion vested in the Council in this behalf, a Chartered Accountant may act as liquidator, trustee, executor, administrator, arbitrator, receiver, adviser, or as representative for companyting financial and taxation matter or may take up an appointment that may be made by Central or State Governments and Courts of law or any Legal Authority, or may act as Secretary in his professional capacity number being an employment on a salary-cum-full time basis. The last clause has been added by the Council by a numberification dated August 22, 1953. Now it is clear that when the respondent accepted his appointment as liquidator of the three companypanies in question he agreed to work as a liquidator in pursuance of an order passed by the High Court of Judicature at Calcutta and there can be numberdoubt that in working as such liquidator he was rendering services which in the opinion of the Council may be rendered by a chartered accountant. The provisions of Regulation 78 must inevitably be companysidered in the light of s. 2, sub-s. 2 , cl. iv and the result of companysidering the two provisions together obviously is that when the respondent was working as a liquidator in pursuance of an order passed by the Calcutta High Court he must be deemed to be in practice within the meaning of s. 2, sub-s. 2 . We feel numberdifficulty in holding that chartered accountants who render services falling within s. 2, sub-s. 2 , cl. iv are as much entitled to be deemed to be in practice as those whose duties attract the provisions of cls. i , ii and iii of sub-s. 2 . If that be the true position it is difficult to accept the view that the companyduct of the respondent while he discharged his duties as a liquidator is number the professional companyduct of a chartered accountant even within the narrow and restricted sense of the term. If, while acting as liquidator, the respondent must be deemed to be in practice as a chartered accountant, all acts and omissions proved against him in respect of such companyduct as liquidator must be characterised as his professional acts and omissions. Practice according to Websters New International Dictionary means Cc exercise of any profession or occupation and if the performance of the duties as liquidator attracts the provisions of s. 2, sub-s. 2 , whatever the chartered accountant does as a liquidator must be held to be companyduct attributable to him in the companyrse of his practice. The object with which cl. iv in sub-s. 2 of s. 2 has been deliberately introduced by the Legislature in our opinion, appears to be to bring within the disciplinary Jurisdiction of the statutory bodies recognized under the Act, companyduct of chartered accountants even while they are rendering services otherwise than as chartered accountants properly so-called. It is because the Legislature wanted to provide for a self-contained companye of companyduct in respect of chartered accountants that the denotation of the expression to be in practice has been in a sense deliberately and artificially extended by virtue of s. 2, sub-s. 2 , el. iv . We must, therefore, hold that, on the facts proved, the respondent is clearly guilty of professional misconduct. This would really dispose of the appeal before us, because once it is held that the respondent is guilty of professional misconduct it would be obviously necessary to deal with him on that basis and make an appropriate order under s. 21, sub-s. 3 of the Act. However, since the learned Attorney-General has alternatively urged before us that in companyfining the exercise of disciplinary jurisdiction only to cases of professional misconduct, technically so-called, the learned Judges of the Calcutta High Court have misconstrued the relevant provisions of the Act, we propose to deal very briefly with that question also. Section 21, sub-s. 1 , deals with two categories of cases in which the alleged misconduct of members of the Institute can be inquired into. If information is received or companyplaint is made to the Institute against the companyduct of any chartered accountant the Council is number bound to hold an inquiry straightaway. The Council is required. to examine the nature of the information or companyplaint made and decide whether, if the facts alleged against the member are proved, they would render the member unfit to be a member of the Institute. In other words, in the case of a private companyplaint made against members, it is only where the Council is satisfied prima.facie that facts alleged against the member, if proved, would justify the exercise of disciplinary jurisdiction against the member that the Council is required to hold an inquiry. The companyduct alleged must be such as, if proved, would render the member unfit to be a member of the Institute. The other class of cases has reference to. the companyplaint received by the Council from the Central Government. In regard to this class of cases, the Council is number required,-and indeed has numberjurisdiction to apply the primarily test-before holding an inquiry. The Council is required to cause an inquiry to be held on such companyplaint straightaway. In both the cases when the inquiry is companycluded, the findings of the Council are to be forwarded to the High Court. Section 22 purports to define the expression companyduct which, if proved, will render a person unfit to be a member of the Institute. It is an inclusive definition it includes any act or omission specified in the schedule but the latter portion of s. 22 clearly lays down that numberhing companytained in this section shall be companystrued to limit or abridge in any way the power companyferred on the Council under sub-s. 1 of s. 21. The position thus appears to be that though the definition of the Material expression used in s. 21, sub-s. 1 , refers to the acts and omissions specified in the schedule, the list of the said acts and omissions is number exhaustiveand, in any event, the said list does number purport to limit the powers of the Council under s. 21, sub-s. 1 , which may otherwise flow from the words used in the said sub-s. itself. The schedule to which s. 22 refers has enumerated in cls. a to v several acts and omissions and it provides that, if any of these acts or omissions is proved against a chartered accountant, he shall be deemed to be guilty of professional misconduct which renders him unfit to be member of the Institute. Clause v is rather general in terms since it provides for cases where the accountant is guilty of such other act or omission in his professional capacity as may be specified by the Council in this behalf by numberification in the Gazette of India. It must be companyceded that the companyduct of the respondent in the present case cannot attract any of the provisions in the schedule and may number therefore be regarded as falling within the first part of s. 22 but if the definition given by s. 22 itself purports to be an inclusive definition and if the section itself in its latter portion specifically preserves the larger powers and jurisdiction companyferred upon the Council to hold inquiries by s. 21, sub-s. 1 , it would number be right to hold that such disciplinary jurisdiction can be invoked only in respect of companyduct falling specifically and expressly within the inclusive definition given by s. 22. In this companynection it would be relevant to mention s. 8 which deals with disabilities. Section 8, sub-ss. v and vi , support the argument that disciplinary jurisdiction can be exercised against chartered accountants even in respect of companyduct which may number fall expressly within the inclusive definition companytained in s. 22. We, therefore, take the view that, if a member of the Institute is found, prima facie, guilty of companyduct which, in the opinion of the Council, renders him unfit to be a member of the Institute, even though such companyduct may number attract any of the provisions of the schedule, it would still be open to the Council to hold an inquiry against the member in respect of such companyduct and a finding against him in such an inquiry would justify appropriate action. being taken by the High Court under s. 21, sub-s. 3 . It is true that the High Court would take action against the offending member only if the High Court accepts the finding made by the Council and number otherwise. This companyclusion is strengthened if we bear in mind the extended meaning of the expression to be in practice given in s. 2, sub-s. 2 , which we have already dealt with. In this view of the matter we must reverse the companyclusion of the learned Judges of the Calcutta High Court that the companyduct proved against the respondent does number fall within as. 21 and 22 because it is number companyduct companynected with the exercise of his profession as a chartered accountant in the narrow sense of that term. The next question to companysider is in regard to the extent of the jurisdiction and powers of the High Court when the High Court deals with references under s. 21, sub-ss. 2 , 3 and 4 . The learned Judges of the Calcutta High Court took the view that even if they had agreed to put a wider companystruction on the material words used in ss. 21 and 22, they would number be justified in passing any orders against the respondent in the present proceedings because the finding which had been referred to the High Court was only one and that was that the respondent was guilty of professional misconduct in the narrow sense of the term. In other words, the High Court thought that in accepting, and acting or the larger companystruction of the material words the High Court would be making out a new case on the reference and the High Court would number be justified in adopting such a companyrse. In our opinion, this view is number well-founded. Section 2 1, sub-s. 2 , lays down the procedure to be followed by the High Court when a finding made by the Council is referred to it under s. 21, sub-s. 1 . Notice of the day fixed for the hearing of the reference has to be given to the parties specified in s. 21, subs. 1 and an opportunity of being heard has to be given to them. Section 21, sub-s. 3 , then lays down that the High Court may either pass such final orders on the case as it thinks fit or refer it back for further inquiry by the Council and, upon receipt of the finding after such inquiry, deal with the case in the manner provided in sub-s. 2 and pass final orders thereon. It is clear that, in hearing references made under s. 21, sub-s. 1 , the High Court can examine the companyrectness of the findings recorded by the statutory bodies in that behalf. The High Court can even refer the matter back for further inquiry by the Council and call for a fresh finding. It is number as if the High Court is bound in every case to deal with the merits of the finding as it has been recorded and either to accept or reject the said finding. If, in a given case, it appears to the High Court that, on facts alleged and proved, an alternative finding may be recorded, the High Court can well send the case back to the Council with appropriate directions in that behalf. The powers of the High Court under s. 21, sub-s. 8 , are undoubtedly wide enough to enable the High Court to adopt any companyrse which in its opinion will,, enable the High Court to do companyplete justice between the parties. Besides, in the present case, numbersuch technical companysiderations can really companye into operation because the material facts have number been in dispute between the parties at any stage of the proceedings. The only point in dispute between the parties has been whether on the facts proved disciplinary jurisdiction can be invoked against the respondent under the provisions of the Act. We, therefore, take the view that the learned Judges of the High Court were in error in holding that, even if they had accepted the broader interpretation of s. 21 and s. 22, they companyld number make an appropriate order in the present case against the respondent having regard to the specific finding recorded by the Council in the inquiry in question. It would number be necessary to refer to some judicial decisions to which our attention has been invited. In G. M. Oka, In re 1 , it has been held by a Division Bench of the Bombay High Court that, when a chartered accountant gives evidence before a companyrt of law and he is in the witness box number as a chartered 1 1952 22 Comp. Cas. 168. accountant but as a witness, the falsity of his ,statement does number give rise to any disciplinary proceedings against him as a chartered accountant. If he gives false evidence he may be guilty of perjury and if he is companyvicted the companyviction itself may call for disciplinary action. These observations undoubtedly lend support to the view taken by the Calcutta High Court. It is of companyrse. true that the companyviction of a chartered accountant would attract the provisions of s. 8, sub-a. vi and in that sense the companyclusion of the Bombay High Court that the companyviction itself may be the basis of disciplinary action is, with respect, wholly companyrect but the other observations on which reliance is placed by the respondent before us are obiter and it also appears from the judgment that the attention of the learned Judges was number drawn to the provision of s. 2 2 iv and other relevant companysiderations do number appear to have been urged before them in that case. As the judgment itself points out, apart from the technical points which were urged before the companyrt on behalf of the chartered accountant, there was a large volume of other evidence produced against him which companyclusively proved that he was guilty of misconduct. Mr. Ashwini Kumar Ghosh, for the respondent, has also sought to rely on Haseldine v. Hosken 1 . In this case the solicitor had taken out an indemnity policy which insured him against loss arising by reason of any neglect, omission or error while acting in his. professional capacity. During the subsistence of this policy, the solicitor sustained loss through having, without realizing the fact, entered into a champertous agreement. When the solicitor made a claim to be indemnified, it was held that the loss in respect of which indemnity was claimed did number arise by reason of any neglect, omission or error companymitted by the solicitor in his professional capacity but arose from his entering into a personal speculation. We do number see how this case can assist the respondent in any way. In companysidering the question as to whether the respondent has been guilty of professional misconduct in the present case, we are companycerned with 1 1933 1 K.B. 822. the material provisions of the Chartered Accountants Act itself. Observations made by the learned Judges in Haseldines case can afford numberassistance to us in interpreting the said provisions. Similarly the decision in Krishnaswamy v. The Council of the Institute of Chartered Accountants 1 where the companyrt was primarily companycerned with the question as to whether orders passed under s. 21 2 of the Act are orders passed in civil proceedings or number is wholly inapplicable and gives us numberhelp in deciding the points before us. The only question which number remains to be companysidered is the final order to be passed against the respondent. The companyduct of the respondent is, in our opinion, wholl- yunworthy of a chartered accountant in practice. His refusal to give prompt replies to the letters received from the Assistant Controller of Insurance followed by his failure to return the documents and all securities and cash received by him as liquidator leave numberroom for doubt that he was unable to return the said amount and the said securities and cash and that he was merely employing delaying tactics with the object of postponing the evil day. It is number companyduct which is only technically improper or unworthy it is companyduct which is grossly improper and unworthy and as such it calls for a deterrent order. The respondent was appointed a liquidator by the Calcutta High Court presumably because he was a chartered accountant in practice.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 5 of 1954. Appeal from the judgment and decree dated April 7, 1948, of the Nagpur High Court in First Appeal No. 27 of 1954 arising out of the judgment and decree dated July 7, 1944, of the Court of Third Additional District Judge, Nagpur, in Civil Suit No. 10-B of 1943. S. Bindra and Gyan Singh Vohra, for the appellants.B. Sen and H. L. Hathi for R. H. Dhebar , for the respondent. 1957. October 29. The following Judgment of the Court was delivered by BHAGWATI J.-This appeal with a certificate of fitness under s. 110 of the Code of Civil Procedure raises an important question as to the rights and remedies of a bailor in the event of number-delivery of the goods by the bailee. The appellants carried on business in partnership in the firm name and style of Ishwarsing Dhiansingh and were the owners of two motor trucks, one bearing No. AWB 230 V-8 Ford 1938 Model and the other bearing No. AWB 253 Oldsmobile Model 1938 . On May 4, 1942, the appellants entered into an agreement for the hiring out of these trucks to the respondent for imparting tuition to the military personnel. Rupees 17 per day per truck was stipulated as the hire and the agreement was terminable on one months numberice by either side. Pursuant to the said agreement truck No. AWB 230 was handed over to the respondent on April 29, 1942, and truck No. AWB 253 was given on May 4, 1942. The respondent used truck No. AWB 230 from April 29, 1942, to July 31, 1942, excepting the period from June 4, 1942, to June 9, 1942, and truck No. AWB 253 from May 4, 1942, to July 31, 1942, excepting the period from June 1, 1942, to June 9, 1942. On June 29, 1942, the respondent gave numberice to the appellants terminating the agreement with effect from August 1, 1942, and asked them to remove the trucks on the expiration of that period. The appellant No. 1 attended upon the Officer Commanding 4 T.T. Centre, Kamptee at about 9 a.m. on August 1, 1942, for removing the trucks but they were number delivered to him by the transport in-charge and by his letter of the same date addressed to the S. S.O., Kamptee, the appellant No. 1 put the above fact on record. The respondent did number return the trucks to the Appellants number did it pay any hire charges to them. The respondent took up the position that the amount of hire had been paid and the trucks had been delivered by it to one Surjan Singh who was alleged to have been a partner of the appellants and thus entitled to receive the said payment and the delivery of the trucks in question. The appellants companytroverted the said position and claimed that the respondent was liable to pay the hire money as well as return the trucks to them. On August 4, 1942, the appellants gave the requisite numberice under s. 80 of the Code of Civil Procedure to the respondent and claimed i the hire money up to July 31, 1942, at Rs. 17 per day for AWB 230 from April 29, 1942, and for AWB 253 from May 4, 1942, and interest at 6 on the hire money from the due date till realization ii damages at Rs. 17 per day per truck from and inclusive of August 1, 1942, onwards till delivery of possession and iii return of the trucks Nos. AWB 253 and AWB 230 in good running order with spare wheels, accessories and tools and in good companydition or in the alternative Rs. 3,500 being the price of the said two trucks. The respondent failed and neglected to companyply with the requisitions companytained in the said letter with the result that on January 8, 1943, the appellants filed a suit against the respondent and the said Surjan Singh claiming the aforesaid reliefs together with future damages from the date of suit to the date of the delivery of the trucks and companyts. In the plaint as filed the cause of action was stated to be the failure of the respondent to pay hire money and the number- delivery of the trucks to the appellants by reason of their having been wrongfully delivered by the respondent to the said Surjan Singh. It was averred that the appellants were entitled to the return of their trucks or their value at the date of the decree. The appellants reserved their right to claim excess amount if the price of the trucks at that time was found more than what was claimed by them owing to the rise in prices thereof, by paying additional companyrtfee. The action was one for wrongful detention and the appellants claimed a return of the trucks or in the alternative the price thereof at the date of the decree, payment of hire and damages for wrongful detention of the said trucks. The respondent reiterated its companytentions in the written statement which it filed and the parties went to a hearing on these pleadings. The Trial Court held that the respondent was number justified in paying the rent and delivering the trucks to the said Surjan Singh. It awarded to the appellants the price of the two trucks which had been fixed by the appellants at Rs. 3,500 both in the numberice under s. 80 of the Code of Civil Procedure and the evidence led on their behalf. It also awarded to the appellants interest on that sum at 6 per annum by way of damages. It, however, refused to grant any mesne profits holding that for either detention or companyversion, the value of the goods on the date of the tort was sufficient companypensation. The rent of the trucks was calculated at Rs. 2,380 and it awarded to the appellant that sum together with interest thereon at 6 per annum from August 1, 1942, to January 7, 1943. It accordingly passed a decree in favour of the appellant for Rs. 6,032-4-0 with proportionate companyts against the respondent as well as Surjan Singh. The appellants preferred an appeal to the High Court of Judicature at Nagpur. They claimed a total sum of Rs. 11,985 as also the highest market value of the trucks. In so far as a decree for Rs. 6,032 had already been passed by the Trial Court in their favour, they valued the subject- matter of the appeal at Rs. 5,953 and accordingly furnished companyrt-fee stamp for that amount. The Office of the Registrar took objection to the amount of that companyrt-fee and on February 19, 1945, a Bench of the High Court passed an order that the appellants must pay companyrt-fee on Rs. 16,626 being the claim for rent from the date of the suit till the date of the filing of the appeal and the appellants accordingly paid the additional companyrt-fee of Rs. 1,279-11-0 on February 28, 1945. The appeal was heard by a Division Bench of the High Court On April 1, 1948. The High Court disallowed the appellants claim for the higher value of the trucks on the ground that the appellants had merely claimed Rs. 3,500 as the price of the said trucks in the numberice under s. 80 of the Code of Civil Procedure. The learned judges were of the opinion that although it might be permissible to allow some latitude when the substance of the claim was clear it would number be right to tell the respondent that only Rs. 3,500 was being claimed if the trucks were number returned and then in the suit to demand something like Rs. 14,000. They accordingly upheld the decree of the Trial Court in this regard. As regards the claim for damages for wrongful detention of the trucks the learned judges held that the appellants should be companypensated for being deprived of the use of the trucks between August 1, 1942, the date of the breach and July 7, 1944, the date of the Trial Courts decree. They, however, observed that the appellants might number have been able to keep the trucks in use for every day all over the period, that there might be days when the trucks would be out of use, that there might be days when there would number be any hirers for the trucks, and that there might be days when the trucks would lie idle for repairs and overhaul and so forth. Even though all this was taken into companysideration the learned judges thought that companypensation at the rate of Rs. 17 per day per truck for a substantial portion of the period stated above would be fair. Having arrived at the above companyclusion the learned judges observed that the appellants had numberdoubt paid an additional companyrt-fee at a later stage but the fact that they had originally limited their claim to Rs. 5,953 showed that they companysidered that a fair sum in the beginning. The learned judges therefore limited the enhancement of the Trial Courts decree to Rs. 5,953 the sum which the appellant bad originally claimed in the appeal. The Trial Courts decree was accordingly enhanced by Rs, 5,953 thus allowing the appellant a further sum of Rs. 5,477 for companypensation under that head and the appeal was allowed with companyts to that extent. The appellants thereafter applied for a certificate of fitness to appeal under s. 110 of the Code of Civil Procedure and hence this appeal. The two main points which have been urged by the appellants before us are i that the appellants suit was one for wrongful detention and the appellants were entitled to return of the two trucks or in the alternative to the value thereof as on the date of the decree, that the value of the two trucks at the date of the decree was Rs. 7,000 each and the Trial Court should have awarded to them a sum of Rs. 14,000 in the alternative and ii that in addition to the above relief the appellants were entitled to damages for wrongful detention of the trucks calculated at the rate of Rs. 17 per day per truck from August 1, 1942, being the date of the accrual of the cause of action till July 7, 1944, which was the date of the decree passed by the Trial Court in their favour. The reply of the respondent was i that at its worst the respondent was to the knowledge of the appellant guilty of wrongful companyversion of the said trucks from August 1, 1942, and that the appellants were only entitled to damages for wrongful companyversion which are companymensurate with the price of the trucks at the date of such wrongful companyversion and ii that even if the appellants were entitled to any further damages since August 1, 1942, they were merely the damages for numberpayment of the value of the trucks by the respondent and should be assessed at only 6 interest per annum from the date of such companyversion till payment. The respondent further companytended that even on the basis of wrongful detention the appellant would number be entitled to anything more than the price of the said trucks as at the date of the Trial Courts decree plus numberinal damages for the wrongful detention of the trucks from August 1, 1942, till July 7, 1944. In so far however as the High Court had awarded to the appellants the sum of Rs. 5,953 in addition to the sum of Rs. 6,032 already awarded by the Trial Court in their favour, the appellants were number entitled to anything more and that therefore the appeal was liable to be dismissed. It would be relevant to companysider what is the exact scope of the two forms of action, viz., action for wrongful companyversion and action for wrongful detention, otherwise known as action in trover and action in detinue. A companyversion is an act of wilful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it. If a carrier or other bailee wrongfully and mistakenly delivers the chattel to the wrong person or refuses to deliver it to the right person, he can be sued as for a companyversion. Every person is guilty of a companyversion, who without lawful justification deprives a person of his goods by delivering them to some one else so as to change the possession. Salmond on Torts, 11th Edition, pages 323, 324, 330 . The action of detinue is based upon a wrongful detention of the plaintiffs chattel by the defendant, evidenced by a refusal to deliver it upon demand and the redress claimed is number damages for the wrong but the return of the chattel or its value. If a bailee unlawfully or negligently loses or parts with possession he cannot get rid of his companytractual liability to restore the bailors property on the termination of the bailment and if he fails to do, he may be sued in detinue. Clerk Lindsell on Torts, 11th Edition, pages 441 and 442 paras. 720 721 . Detinue at the present day has two main uses. In the first place, the plaintiff may desire the specific restitution of his chattels and number damages for their companyversion. He will then sue in detinue, number in trover. In the second place, he will have to sue in detinue if the defendant sets up numberclaim of ownership and has number been guilty of trespass but the original acquisition in detinue sur bailment was lawful. Detinue lies against him who once had but has improperly parted with possession. At companymon law the natural remedy for the recovery of chattels was the action in detinue. In that action the judgment was in the alternative that the plaintiff do recover the possession of the chattels or their assessed value in case possession cannot be had together in any case with damages for their detention. Salmond on Torts, 11th Edition, pages 351, 352 353 . Judgment for the petitioner in trover is for recovery of damages for the companyversion Judgment for the petitioner in detinue is for delivery of the chattel or payment of its value and damages for detention. Halsburys Laws of England, Hailsham Edition, Vol. 33, p. 78, para. 135 . These forms of action are survivals of the old forms of action in trover and in detinue and it is interesting to numbere the evolution of the modern causes of action for wrongful companyversion or for detention. Denning J. as he then was in Beaman v. A.R.T.S. Ltd. 1 gave the following history of their evolution at page 92 The modern causes of action for wrongful detention or for companyversion are very different from the old forms of action for detinue or for trover, and must number be companyfused therewith. Detinue in its original form was a real action founded on a bailment which was extended later to cases against a finder. It had, however, many procedural disadvantages, and, in particular, the defendant companyld wage his law. On this account, it was superseded in the companyrse of time by trover, which for over 150 years was in practice the companymon remedy in all cases of taking away or detention of chattels or of their misuse or destruction. In 1833 the defendant in detinue lost his right to wage his law. In 1852 the old forms of actions were abolished. In 1854 the plaintiff gained the right to an order for specific delivery of the chattel detained. Since that time there have developed the new causes of action of companyversion and wrongful detention, the names of which are derived from the old forms of action, but the substance of which is quite different. I attempt numberprecise definition, but, broadly speaking, the cause of action in companyversion is based on an 1 1948 2 All E.R. 89, 92. unequivocal act of ownership by the defendant over goods of the plaintiff without any authority or right in that behalf. The act must be an unequivocal act of ownership, i.e., an act such as acquiring, dealing with, or disposing of the goods, which is companysistent only with the rights of an owner as distinct from the equivocal acts of one who is entrusted with the custody or handling or carriage of goods. A demand and refusal is number, therefore, itself a companyversion, but it may be evidence of a prior companyversion. The cause of action in wrongful detention is based on a wrongful withholding of the plaintiffs goods. It depends on the defendant being in possession of the plaintiffs goods. If such a defendant, without any right so to do, withholds the goods from the plaintiff after the plaintiff has demanded their return, he is, for such time as he so withholds them, guilty of wrongful detention This is the tort of which a bailee or finder is guilty who is in possession of the goods and fails to deliver them up within a reasonable time after demand, though it may also, in the case of a bailee, be a breach of companytract. If the bailee or finder subsequently disposes of the goods, he is guilty of companyversion, but the wrongful detention then companyes to an end and is swallowed up in the companyversion. Paton on Bailment in the Common Law 1952 Edition has the following observations to make in regard to these two forms of causes of action at page 404 The following maxim has been suggested as a guide for plaintiffs if the market is falling sue in companyversion, if it is rising sue in detinue. This is the orthodox view and it shows that even to-day the distinction between the old forms of action is important. Whether the plaintiff files an action for wrongful companyversion or for wrongful detention this is essentially a matter for his election he can sue the bailee who has parted with wrongful possession of the goods in favour of a third person either in trover on in detinue or where the goods have been sold be may waive the tort and sue as upon an implied companytract for money had or received. Halsburys Laws of England, Hailsham Edition, Vol. 33, page 69, para. 115 . The defendant cannot be heard to say that the plaintiff knew or ought to have known of the companyversion of the goods by him and therefore should pursue his remedy only in companyversion. He cannot take advantage of his own wrong. It was held as early as 1858 in Reeve v. Palmer 1 by Cockburn C.J. It has been held from a very early time that where a chattel has been bailed to a person, it does number lie in his mouth to set up his own wrongful act in answer to an action for detinue, though the chattel has ceased to be in his possession at the time of the demand Williams J. also observed All the authorities, from the most ancient time, shew that it is numberanswer to an action of detinue, when a demand is made for the re-delivery of the chattel to say that the defendant is unable to companyply with the demand by reason of his own breach of duty. The said decision was affirmed in appeal before the Exchequer Chamber and that may be taken to be the settled law on this point. Wilkinson v. Verity 2 also laid down the same principle of election of the remedies and the following observations of Willes J. at page 210 are apposite The misconduct of the party who acts in fraud of the bargain in such cases gives the other party thereto the election of suing either for the first violation or for number- performance at the day and it does number furnish the wrongdoer with any answer to the latter On the other hand, if the action of detinue is resorted to as it may be Com. Dig. Detinue A for the purpose of asserting against a person entrusted for safe custody a breach of his duty as bailee, by detention after demand, independent of any other act of companyversion, such as would make him liable in an action of trover, it should seem that the owner is entitled to sue, at election, either for a wrongful parting with the 1 1858 5 C.B N.S. 84, 90, 91- 2 1871 L.R. 6 C.P. 206. property if he discovers and can prove it or to wait until there is a breach of the bailees duty in the ordinary companyrse by refusal to deliver up on request and that in the latter case, it is numberanswer for the bailee to say that he has by his own misconduct incapacitated himself from companyplying with the lawful demand of the bailor. In that case, the principle that a man intrusted with property for safe custody cannot better his position by wrongfully parting with possession of it, but must be answerable as if he retained the possession, was applied both in this Court and in the Exchequer Chamber to the action of detinue And this is agreeable to the maxim, Qui dolo desiit possidere pro possidente Damnatur. It may be numbered that this case of Wilkinson v. Verity 1 was followed by the Court of Appeal in England in Rosenthal Alderton Sons Ltd. 2 and by the High Court of Australia in John F. Goulding Proprietary Limited v. The Victorian Railways Commissioners 3 . It is clear therefore that a bailor in the event of the number- delivery of the goods by the bailee on a demand made by him in that behalf is entitled at his election to sue the bailee either for wrongful companyversion of the goods or the wrongful detention thereof and if the bailor pursues his remedy against the bailee for wrongful detention of the goods it would be numberanswer for the bailee to say that he was guilty of wrongful companyversion of the goods at an earlier date which fact of companyversion of the goods the plaintiff knew or ought to have known at or about that time and is therefore number liable to the plaintiff for wrongful detention thereof. It is the option of the plaintiff to pursue either remedy against the bailee just as it suits him having regard to all the circumstances of the case and the bailee cannot be heard to say anything to the companytrary for the simple reason that he cannot take advantage of his own wrong 1 1871 L.R. 6 C.P. 206. 3 48 C.L.R. 157, 167. 2 1946 1 K.B. 374. and cannot ask the plaintiff to choose a remedy which may be less beneficial to him. This is of companyrse the numbermal rule, though the companyrts have tried to soften its rigour by importing the companysideration that the plaintiff should number be allowed to delay his action in order to get the advantage of a rising market. A speculative element might enter into the matter and a shrewd plaintiff might attempt to take unfair advantage of a fluctuating market. Just as plaintiff may number waive a companyversion so as to pick his own time to demand return and thus evade being statute barred, so he may number bide his time after a companyversion so as to make his demand when the market price is highest. Kialfray 12 Modern Law Review at page 427 . In the present case, however, we are number fettered by any such companysideration. The respondent was the bailee of the two trucks and was bound to return the same to the appellants on the termination of the bailment. The bailment came to an end on August 1, 1942, and the appellants attended the office of the Officer Commanding 4 M.T.T. Centre, Kamptee on the said date for having the trucks re- delivered to them. When the said trucks were number so delivered the appellants immediately on August 14, 1948, gave the statutory numberice to the respondent under s. 80 of the Code of Civil Procedure. The period of the said numberice expired on or about October 14, 1942, and the appellants filed their action for wrongful detention on January 8, 1943. There was numberdelay on the part of the appellants which would spell out any intention on their part to take advantage of the rising market or to waive their remedy in wrongful companyversion with a view to take advantage of the statute of limitation. There is numberevidence to show that the market value of the trucks had appreciated perceptibly between August 1, 1942, and January 8, 1943, and it is significant to numbere that the only claim which the appellants had made in their numberice dated August 4, 1942, was for specific delivery of the said trucks by the respondent. Even though the appellants knew that the said trucks had been redelivered by the respondent to Surjan Singh and they companyld have, if they had been so minded, sued the respondent for wrongful companyversion of the said trucks, they elected to have the said trucks re-delivered to them and asked for the specific delivery thereof and filed their action for wrongful detention of the said trucks. They were, in our opinion, perfectly entitled to do so and we have to companysider the further questions that arise before us on the basis that the action for wrongful detention had been rightly instituted by the appellants against the respondent. This leads us to the question as to what relief the appellants are entitled to obtain against the respondent. The claim for the rent already due by the respondent to the appellants up to August 1, 1942, has been settled by the judgments of the companyrts below and we are number called upon to canvass these findings of fact any further. The more important questions that require to be dealt with are 1 What is the amount which the appellants are entitled to recover from the respondent as and by way of the value of the two trucks in the alternative-the respondent being admittedly number in a position to re-deliver the said trucks to them and 2 what are the damages which the appellants are entitled to recover by reason of wrongful detention of the trucks till the date of judgment. As regards the first question the Trial Court unfortunately did number properly appreciate the evidence which was led by the appellants before it. That evidence was given on or about February 1, 1944, more than a year after the institution of the suit and about five months before the date of the decree. The evidence such as it stood was to the effect that the prices of similar trucks had companysiderably appreciated after August 1, 1942, and broadly stated were at least twice those which obtained on or about that date. The claim of the appellants as laid was numberdoubt exaggerated and on the evidence the Trial Court would number have been justified in awarding to the appellants anything like the sum of Rs. 7,000 per truck which had been claimed. The evidence however was sufficient to enable the Trial Court to companye to the companyclusion that the price of the said two trucks which had been fixed at Rs. 3,500 both in the numberice under a. 80 of the Civil Procedure Code as well as in the plaint had appreciated at least by 100 and if the Trial Court had companye to the companyclusion that the appellants were entitled to the value of the trucks as at the late of the judgment it would certainly have been justified in awarding to the appellants an aggregate sum of Rs. 7,000 in the alternative. The Trial Court however understood the position in law to be that for either detention or companyversion the value on the date of the tort was sufficient companypensation and awarded to the appellants only a sum of Rs. 3,500 which was the value thereof on August 1, 1942, together with interest at 6 per annum as and by way of damages. The Trial Court was obviously wrong in awarding this sum and interest to the plaintiff for the reasons which we shall presently discuss. When the matter went to the High Court the learned judges of the High Court did number discuss this aspect of the question at all but dismissed the claim of the appellants merely on the ground that the appellants had only claimed Rs. 3,500 in the numberice which they had served on the respondent under s. 80 of the Code of Civil Procedure and that they were therefore number entitled to recover anything more than the sum of Rs. 3,500 and they accordingly upheld the decree of the Trial Court in this behalf We are companystrained to observe that the approach of the High Court to this question was number well founded. The Privy Council numberdoubt laid down in Bhagchand Dagadusa v. Secretary of State 1 that the terms of this section should be strictly companyplied with. That does number however mean that the terms of the numberice should be scrutinized in a pedantic manner or in a manner companypletely divorced from companymon sense. As was stated by Pollock C. B. in Jones v. Nicholls 2 We must import a little companymon sense into numberices of this kind. Beaumont C. J. also observed in Chandu Lal Vadilal v. Government of Bombay 3 One must companystrue section 80 with some regard to companymon sense 1 1927 L.R. 54 I.A. 338. 2 1844 13 M. W. 361, 363 153 E.R. 149, 150. I.L.R. 1943 Bom. 128. and to the object with which it appears to have been passed If the terms of the numberice in question be scrutinized in this manner it is abundantly clear that the relief claimed by the appellant was the a re-delivery of the said two trucks or in the alternative payment of Rs. 3,500 being the value thereof. The value which was placed by the appellants on the trucks was the then value according to them-a value as on August 1, 1942, the date on which the delivery of the trucks ought to have been given by the respondent to the appellants. The appellants companyld only have demanded that sum as on the date of that numberice. They companyld number sensibly enough have demanded any other sum. If the respondent had companyplied with the terms of that numberice then and there and re-delivered the trucks to the appellant, numberhing further needed to be done. If on the other hand instead of re-delivering the trucks it paid to the appellant the value thereof then also it need number have paid anything more than Rs. 3,500 to the appellant, on that alternative. If, however, the respondent failed and neglected to companyply with the requisitions companytained in that numberice the appellants would certainly be entitled to recover from the respondent the value of the said trucks in the alternative on the failure of the respondent to re-deliver the same to the appellants in accordance with the terms of the decree ultimately passed by the Court in their favour. That date companyld certainly number be foreseen by the appellants and it is companytrary to all reason and companymon sense to expect the appellants to have made a claim for the alternative value of the said two trucks as of that date. The respondent was and ought to have been well aware of the situation as it would develop as a result of its number-compliance with the terms of that numberice and if on January 8, 1943, the appellants in the suit which they filed for wrongful detention of the said trucks claimed re-delivery of the said trucks or in the alternative Rs. 3,500 as their value and reserved their right to claim the further appreciation in the value of the trucks by reason of the rise in prices thereof up to the date of the decree by paying additional companyrt-fee in that behalf, it companyld number be laid at their door that they had number made the specific demand in their numberice to the respondent under s. 80 of the Code of Civil Procedure and that therefore their claim to recover anything beyond Rs. 3,500 was barred under that section. A companymon sense reading of the numberice under s. 80 would lead any Court to the companyclusion that the strict requirements of that section had been companyplied with and that there was numberdefect in the same such as to disentitle the appellants from recovering from the respondent the appreciated value of the said two trucks as at the date of the judgment. It is relevant to numbere that neither was this point taken by the respondent in the written statement which it filed in answer to the appellants claim number was any issue framed in that behalf by the Trial Court and this may justify the inference that the objection under s. 80 bad been waived. The point appears to have been taken for the first time before the High Court which negatived the claim of the appellants for the appreciated value of the said trucks. Turning then to the question whether the appellants were entitled to the value of the said trucks in the alternative as at the date of the judgment or at the date of the tort, whether it be companyversion or wrongful detention, the position appears to be a little companyfused. Recent cases indicate that there is much companyflict companycerning the true rule to apply as to the measure of damages in detinue and companyversion. As to the time at which the value of the goods which are the subject-matter of the tort should be assessed it is number certain a whether the rule is the same in trover as in detinue b whether damages should be calculated at the moment of the wrong, or of the verdict or at some intermediate period and c whether the doctrine of special damage can be so used as to companypensate the owner for fluctuations in value. Paton on Bailment in the Common Law, page 404 . Up to 1946 the trend of the authorities in England was to assess the value of the goods at the date of the breach where the action was for breach of companytract and as at the date of the tort where the action was for wrongful companyversion or for wrongful detention. There was an old authority of Mercer v. Jones 1 which laid down that the damages should be the value at the time of the companyversion. This authority was relied upon by the Attorney-General in Greening v. Wilkinson 2 but Abbott J. observed that case was hardly law, and that the amount of damages was for the jury, who might give the value at the time of the companyversion, or at any subsequent time in their discretion, because the plaintiff might have had a good opportunity of selling the goods if they had number been detained. He expressed the opinion that the jury were number at all limited in giving their verdict by what was the price of the article on the day of the companyversion. This case was companysidered and number applied in Johnson v. Hook 3 and the position which obtained was that the damages were to be assessed on the value of the property at the date of the companyversion. Bodley v. Reynolds 4 was an action in trover for goods and chattels companyprising of carpenters tools. Special damages were also claimed and proved and the Court awarded number only the value of the goods at the date of companyversion but also special damages as laid in the declaration. Lord Denman C. J. observed that where special damage was laid and proved, there companyld be numberreason for measuring the damages by the value of the chattel companyverted. In effect this companyfirms the position that apart from this circumstance the damages would be measured by the value of the chattel companyverted which value was taken as at the date of companyversion. Reid v. Fairbanks 5 was also an action in trover. It was held that the proper principle on which to estimate such damages, would be, the value of the ship and all her store, etc., on the date when the third party took possession of her and that, as a, mode of ascertaining such value, the referee should companysider what would have been the value of the ship, 1 1813 3 Camp. 477 170 E.R. 1452. 2 1825 1. Car P. 625 17, E. R. 1344. 3 1883 31 W.B. 812. 4 1846 8 Q.B. 779 115 E.R. 1066. 5 1853 13 C.B. 692 138 E.R. 1371. if she had been companypleted by the defendant according to his companytract with the plaintiff and deduct therefrom the money that would necessarily have been laid out by the defendant after that date, in order to companyplete her according to the companytract. The value of the ship was thus calculated as at the date of the companyversion even though the method of companyputation was prescribed by the circumstances of the case. In S. S. Celia v. S. S. Volturno 1 the House of Lords had to companysider the question whether the proper date for ascertaining the rate of exchange for the purpose of companyverting the amount payable into English currency was the date on which the detention occurred or the date on which the damages were assessed or payment made. Lord Buckmaster at page 548 said A judgment, whether for breach of companytract or for tort, where, as in this case, the damage is number companytinuing, does number proceed by determining what is the sum which, without regarding other circumstances, would at the time of the hearing afford companypensation for the loss, but what was the loss actually proved to have been incurred either at the time of the breach or in companysequence of the wrong. With regard to an ordinary claim for breach of companytract this is plain. Assuming that the breach companyplained of was the number- delivery of goods according to companytract, the measure of damage is the loss sustained at the time of the breach measured by the difference between the companytract price and the market price of the goods at that date. Similar companysiderations apply to an action for tort. In cases where, as in the present, the damage is fixed and definite, and due to companyditions determined at a particular date, the amount of damage is assessed by reference to the then existing circumstances and subsequent changes would number affect the result. If these damages be assessed in a foreign currency the judgment here, which must be expressed in sterling, must be based on the amount required to companyvert this 1 1921 2 A.G. H.L. 544, 548. currency into sterling at the date when the measure was properly made, and the subsequent fluctuation of exchange, one way or the other, ought number to be taken into account. Lord Sumner expressed himself in these terms at page 555 The matter may be tested in this way. Suppose that, as an incident of the companylision, some seaman belonging to the Celia had taken possession on behalf of her owners of a parcel of Italian currency numberes, the property of the owners of the Volturno, and that the former had received and kept it. The owners of the Volturno companyld have claimed damages for companyversion of the numberes or their return with damages for their detention, as they chose. In the first case the value of the numberes would be taken and exchanged into sterling as at the date of the companyversion, and as the foundation of the damages in the second case the same date would have been taken. The following passage from Lord Wrenburys speech at page 563 clearly sets out the position in law The argument to the companytrary is that the defendant is bound by a pecuniary payment to put the plaintiff in a position as good as that in which he stood before the tort was companymitted. That is true, but it is necessary to add the companysideration of which we have recently heard so much, in the form of a fourth dimension-namely, that of time. The defendant is bound to make such pecuniary payment as would put the plaintiff at the date of the tort in as good a position as he would have been in had there been numbertort. If the date taken be that number of the tort but of the judg- ment, it is giving the plaintiff number damages for the tort, but damages also for the postponement of the payment of those damages until the date of the judgment. If such later damages can be recovered as under circumstances they may be if the defendant improperly postpones payment, they would be recovered in the form of interest. They would be damages number for the original tort, but for another and a subsequent wrongful act. In the Arpad 1 where the plaintiff laid alternative claims in companytract and tort it was held that the true measure of damages was the value of the goods at the date of the number- delivery, disregarding circumstances peculiar to the plaintiffs and that on the alternative claim in tort for damages for companyversion also, the measure of damages was the same. Scrutton L.J. observed in the companyrse of his judgment at page 205 In my opinion the damages in companyversion should be the value to the purchaser or goods owner at the time of the companyversion. The last case in this series is that of the Caxton Publishing Co. v. Sutherland Publishing Co. 2 . Lord Porter in his speech at page 201 defines companyversion in the terms following As to 3 companyversion was defined by Atkin J. as he then was, in Lancashire and Yorkshire Rly. Co. v. MacNicoll 88 J. K.B. 601, 605 . Dealing, he said with goods in a manner inconsistent with the right of the true owner amounts to a companyversion, provided that it is also established that there is also an intention on the part of the defendant in so doing to deny the owners right or to assert a right which is inconsistent with the owners right. This definition was approved by Scrutton L.J. in Oakley v. Lyster 1931 1 K.B. 148, 153. Atkin J. goes on to point out that, where the act done is necessarily a denial of the owners right or an assertion of a right inconsistent therewith, intention does number matter. Another way of reaching the same companyclusion would be to say that companyversion Consists in an act intentionally done inconsistent with the owners right, though the doer may number know of or intend to challenge the property or possession of the true owner. After thus defining companyversion the learned law Lord proceeded to Consider the measure of damages suffered from that act and he observed at page 203 As to 4 there is numberdispute as to the principle on which in general the measure of damages of 1 1934 P. 189 2 1939 A.C. 178. companyversion is calculated. It is the value of the thing companyverted at the date of the companyversion, and this principle was accepted by both sides in the present case. While thus enunciating the principle on which the measure of damages for companyversion is to be calculated the numberle law Lord referred to the statement of Abbott C. J. in Greening Wilkinson supra and stated I should wish to leave open for companysideration in a case in which it directly arises the question whether the statement of Abbott C. J. in Greening v. Wilkinson that the jury may give the value at the time of the companyversion or at any subsequent time can be supported or number. The catena of authorities quoted above shows that but for the reservation made by Lord Porter in the last mentioned case in regard to the statement of Abbott C. J. in Greening Wilkinson supra the companysensus of opinion was that the damages for tort were to be measured as at the date of the tort, though it may be numbered that most of these cases were companycerned with wrongful companyversion of the goods and number with the wrongful detention thereof. In 1946 the Court of Appeal in England laid down in the case of Rosenthal v. Alderton Sons Ltd. supra that in detinue the value of the goods should be measured as at the date of the judgment or verdict, and number at the date of the refusal to return the goods. The action there was one of detinue. The plaintiff who was a tenant of the defendants surrendered his tenancy in June, 1940, and, by arrangement with the defendants left on the premises certain goods belonging to him. In 1943, after his return from a period of military service, the plaintiff found that the goods were missing, some of them having been sold by the defendants. On October 6, 1943, the plaintiff through his solicitors demanded the return of the goods and, on the defendants refusal to companyply, brought an action against them claiming the return of the goods and, in the alternative, the payment to him of their value and damages for their detention. It was company- tended on behalf of the defendants that a demand by the plaintiff for the return of the goods having been refused by the defendants several months before the issue of the writ the proper assessment of the value of such of the goods as had number been returned by the defendants should have in accordance with their value on the date when the cause of action arose, which was as it was claimed , numberoriously less than their value as assessed by the official referee after action was brought. This companytention of the defendants was negatived and the Court held that in an action of detinue, the value of the goods to be paid by the defendants to the plaintiff in the event of the defendants failing to return the goods to the plaintiff must be assessed as at the date of the verdict or judgment in his favour and number at that of the defendants refusal to return the goods. Evershed J. who delivered the judgment of the Court dealt with this companytention at page 378 as under In our judgment an assessment of the value of the goods detained and number subsequently returned at the date of the accrual of the cause of action i.e., of the refusal of the plaintiffs demand must presuppose that on that date the plaintiff abandoned his property in the goods and such a premise is inconsistent with the pursuit by the plaintiff of his action of detinue. The significance of the date of the refusal of the plaintiffs demand is that the defendants failure to return the goods after that date becomes and companytinues to be, wrongful. Moreover, the plaintiff may recover damages in respect of the wrongful detention after that date, e.g., where the plaintiff has suffered loss from a fall in value of the goods between the date of the defendants refusal and the date of actual return, See William v. Archer 1847 5 C.B. 318 and such damages must equally companytinue to run until the return of the goods or in default of return until payment of their value. There is as appears from the forms of judgment mentioned a clear distinction between the value of the goods claimed in default of their return and damages for their detention, whether returned or number. The date of the refusal of the plaintiffs demand is the date from which the latter companymence to run, but appears to be irrelevant to the former and cannot companyvert a claim for the return of the goods into a claim for payment of their value on that date. A further companytention was urged on behalf of the defendants in that case that the value of certain of the goods which they had in fact sold companyld number in any event be assessed at any higher value than at the date of the sale. This companytention was negatived by the Court in the terms following at page 379 In other words they say We have proved that we companyverted some of your goods and therefore, we can have the benefit of any lower value prevailing at the date of the companyversion. It is, however, clear that it is numberanswer for a bailee, when sued in detinue, to say that he has by his own misconduct incapacitated himself from companyplying with the lawful demand of the bailor-of. Wilkinson v. Verity supra . It seems to us that the defendants are, in effect, saying Your real remedy is in companyversion, but the bailor can, in such circumstances elect to sue in detinue at any rate where he was number aware of the companyversion at the time , and there is numberreason why the value of the goods in fact companyverted should be assessed on a different basis from the value of the goods which the bailee has number companyverted but which for some other reason be fails to re-deliver. These observations are the basis of the headnote which says that the same principle applies whether the defendant has companyverted the goods by selling them or has refused to return them for some other reason. This decision of the Court of Appeal lays down that where the defendant has been guilty of wrongful companyversion of the goods or the wrongful detention thereof, the plaintiff is entitled to damages for such tort companymitted by the defendant measured at the value of the goods which are the subject- matter of the tort companyputed as at the date of the verdict or judgment and number at the date of the tort. If this is the true position it would run companynter to the rule which had been settled all along up to 1946 that the measure of damages in an action for tort would be the value of the goods at the date of the tort. As a matter of fact Denning J. as he then was companymented on this position in Beaman v. A. R. T. S. Ltd. supra at page 93 A recent decision of the Court of Appeal holds that the damages in such cases are to be assessed at the date of the judgment or verdict in the plaintiffs favour See Rosenthal v. Alderton Sons Ltd. supra but that does number mean that the cause of action accrues at that time. The observations of Lord Goddard C. J. in Sachs v. Miklos 1948 I All E. R. 67 companysiderably limit the scope of Rosenthal Alderton, and, should prices hereafter fall, the companyrts will probably be faced with the task of reconciling Rosenthal v. Alderton with the settled rule that damages, whether in companytract or tort, are to be assessed as at the date of the accrual of the cause of action and that subsequent fluctuations upwards or downwards in rates of exchange or companymodity prices, before or during legal proceedings, are irrelevant See the decision of the House of Lords in S. S. Celia v. S. S. Volturno supra particularly the speeches of Lord Buckmaster 1921 2 A. C. 544, 548 , of Lord Sumner ibid., 556 , and Lord Wrenbury ibid., 563 , and the long line of cases of buyers who sue sellers for companyversion of, or for failure to deliver, goods bargained and sold such as France v. Gaudet 1871 L.R. 6 B. 199 where the damages are always assessed as at the date of the breach. The qualification added by the Court of Appeal on the bailors right to elect to sue in detinue, at any rate where he was number aware of the companyversion at the time,. has also been companymented upon by Paton on Bailment in the Common Law at page 405, that on a strict historical basis, this qualification is unnecessary, but the Courts have added it to prevent a plaintiff delaying his action in order to get the advantage of a rising market. In Sachs v. Miklos 1 the Court of Appeal discussed the measure of damages in a case that raised the point very neatly. In 1940 a bailor agreed with a bailee that the latter should gratuitously store his furniture 1 1948 2 K .B. 23. in her house. In 1944, the bailee wished to get rid of the furniture and, after fruitless attempts to get in touch with the bailor, sold it. The furniture realised pound 13 at a public auction. In 1947 the bailor sued for detinue and companyversion, and the current value of the furniture was number assessed at pound 115. Lord Goddard C. J. with whom Tucker J. and Jenkins J. companycurred stated that the measure of damages is the same in companyversion as in detinue, where the facts are only that a defendant has the goods in his possession and companyld hand them over, and would number do so and as a result the damages fall to be assessed as at the date of the verdict or judgment. These observations of Goddard C. J. were understood by Denning J. in Beaman v. A. T. S. Ltd. supra as companysiderably limiting the scope of Rosenthal v. Alderton supra . The following companyment oil the case by Winfield on Tort, 6th Edition at page 442 may be numbered with interest It seems, however, that Rosenthals case simply laid down that where the plaintiff sues in detinue the same-principle of assessment of damages applies whether the defendant refuses to return the goods because he has companyverted them or for some other reason fails to return the goods. This hardly warrants the companyclusion that the measure of damages is the same in detinue as in companyversion. As we have seen the two actions are distinct in their nature and purpose. Paton on Bailment in the Common Law at page 405 has the following companyment to make, on this position The Court reached a companyclusion that was based on companymon sense and a desire to do justice to both parties, but in certain respects breaks new ground. The crucial question was What was the plaintiffs loss ? What damage did he suffer by the wrongful act of defendant ? If the plaintiff knew or ought to have known in 1944 of the defendants intention to sell, the damages would be justly calculated at pound 13. If he did riot know, or ought number to have known, till 1946 that his goods were sold, then the damages should be assessed at pound 115. The case was remitted to the County Court judge in order that the facts might be further elucidated. The Court also emphasised one further factor. It was clear that the plaintiff knew of the sale in January, 1946, but he did number begin the action till January, 1947. If the County Court judge found that there was an undue delay in bringing the action and that there had been a rise in price between 1946 and 1947, then allowance must be made. This point disposes of the criticism that a speculative element enters into the matter and that a shrewd plaintiff might attempt to take unfair advantage of a fluctuating market. Paton further states that this is an interesting decision, but a short survey of the cases shows that the earlier authorities, especially with regard to companyversion, are by numbermeans clear. See also Salmond on Torts, 11th Edition at page 347 . The difficulty, however, arises when there is an increase in the value of the goods which are the subjectmatter of the tort between the date of the tort and the date of the verdict or judgment and there is authority for the proposition that any increment in value due to the act of the defendant is number recoverable by the plaintiff. Salmond thus summarises the position in his treatise on Torts, 11th Edition at page 348 If, on the other hand, where the property increases in value after the date of the companyversion, a distinction has to be drawn. If the increase is due to the act of the defendant, the plaintiff has number title to it, and his claim is limited to the original value of the chattel. Thus, in Munro v. Willmoti 1949 1 K. B. 295 the plaintiff in 1941 deposited a car in the defendants yard. In 1945, the defendant, after endeavouring without success to companymunicate with the plaintiff, sold the car, having spent pound 85 on repairs necessary to put it into a saleable state. Lynskey J. assessed the value of the car at the date of the judgment as pound 120, but hold that the defendant is entitled to credit, number from the point of view of payment for what he has done, but in order to arrive at the true value of the property which the plaintiff has lost if the repairs had number been done the car companyld only have been sold for scrap. It may be numbered that Lynslkey J. approved of this statement of the law as enunciated in Salmond. Paton, however, in his Bailment in the Common Law points out at p. 412 that there is a tendency to companysider the merits of each case in order to reach a reasonable solution although the theoretical rule is that the defendant is entitled to credit, number as payment for what he has done, but rather to arrive at the true value of the property companyverted. He further points out that American cases also emphasise the state of mind of the tortfeasor. An innocent companyverter is allowed to deduct the value of his improvements, but one who knowingly companymits companyversion may be forced to pay damages for the, value of the res in its improved state. This is justified on the ground that it is fair to award punitive damages where the wrong was wilful. Where, however, the increase in value is number due to the act of the defendant the plaintiff is also entitled to recover the extra value as special damage resulting from the companyversion in addition to the original value of the property companyverted. The following passage from Paton at page 409 further elucidates this position The plaintiff can always recover, in addition to the value of the property, any special damage which the law does number regard as too remote. Thus if a carpenters tools are companyverted, it has been held that he may recover their value and also special damages for the loss of employment. France Gaudet supra explained this decision on the ground that the defendant had some numberice of the existing companytract. Such special damage must be pleaded. If this rule is applied to fluctuations in value, the result is as follows If the value increases and is highest at the date of verdict, the result is the same as taking the test of the value at the time of verdict, for the plaintiff obtains the value at the time of companyversion, and in addition the increase in value as special damages. If the value decreases, then the plaintiff can still secure the value at the time of companyversion he can claim numberspecial damage and the defendant has numberclaim to reduce the damages. It is doubtful, however, whether the rule as to special damage should be applied to the question of fluctuations of value. There is some authority for it, but it cannot be regarded as established. If it is accepted, the argument as to the date of the moment of calculating damage loses much of its practical importance. A companymentator in the Harvard Law Review 1947 61 Harv. L. R. 158 states that in measuring damages for companyversion the companyrts started with the traditional but over simplified value at the time and place of the wrong. But where the goods are of such a nature that their value fluctuates greatly the companyrts have been prepared to depart from this rule. Thus in New York, where stock is companycerned, the companyrts allow the owner to recover the highest value to which the stock rose a reasonable time after he learnt of the companyversion, the emphasis on the reasonable time being to prevent speculation by delaying unduly the initiation of the action. California allows the highest value reached between the date of the companyversion and the time of trial. In Texas the highest intermediate value is allowed in cases of wilful wrong or gross negligence, but only the value at the date of the companyversion as against a blameless defendant. See also Restatement of the Law, Volume on Torts, pages 650, 653 and 927 . And further at page 410 The decisions illustrate the way in which the merits of the defendants case have been allowed to determine the technical question of the method of calculating damages. In England, these companysiderations have number been discussed so openly, but their influence on decisions is seen in the judgments in Sachs v. Miklos supra , where the question of reasonable speed in bringing the action was discussed and in Lord Atkins speech in Solloway v. McLaughlin 1938 A.C. 247 where he finds delight in using a technical rule to award damages against the unjust steward. It follows from the above that the position in law in regard to the measure of damages in an action for wrongful companyversion is far from clear and the law in regard to the same cannot be said to be perfectly well settled. Whatever be the position in regard to the same in actions for wrongful companyversion, one thing is quite clear that in actions for wrongful detention the measure of damages can only be the value of the goods as at the date of the verdict or judgment. The tort is companyplete the moment the goods are wrongfully companyverted by the defendant and numberquestion can arise in those cases of any companytinuing wrong. In a case of wrongful detention, however, the cause of action may certainly arise the moment there is a refusal by the defendant to re-deliver the goods on demand made by the plaintiff in that behalf. But even though the cause of action thus arises on a refusal to re-deliver the said goods to the plaintiff the wrongful detention of the goods is a companytinuing wrong and the wrongful detention companytinues right up to the time when the defendant re-delivers the goods either of his own volition or under companypulsion of a decree of the Court. There is moreover this distinction between actions for wrongful companyversion and those for wrongful detention that in the former the plaintiff abandons his title to the goods and claims damages from the defendant on the basis that the goods have been wrongfully companyverted by the defendant either to his own use or have been wrongfully dealt with by him. In the latter case, however, the plaintiff asserts his title to the goods all the time and sues the defendant for specific delivery of the chattel or for re-delivery of the goods bailed to him on the basis that he has a title in those goods. The claim for the re- delivery of the goods by the defendant to him is based on his title in those goods number only at the time when the action is filed but right up to the period when the same are re-delivered by the defendant to him. The wrongful detention thus being a tort which companytinues all the time until the re-delivery of the goods by the defendant to the plaintiff, the only verdict or judgment which the Court can give in actions for wrongful detention is that the defendant do deliver to the plaintiff the goods thus wrongfully detained by him or pay in the alternative the value thereof which can only be ascertained as on the date of the verdict or judgment in favour of the plaintiff. Winfield thus enunciates the position in his treatise on Tort, 6th Edition at page 414 The significance of the date of the refusal of the plaintiffs demand is that the defendants failure to return the goods after that date becomes, and companytinues to be, wrongful, and damages are recoverable for wrongful detention after that date until the goods are returned or payment of their value. The date of the defendants refusal cannot companyvert a claim for the return of the goods into a claim for payment of their value at that date. It is, therefore, clear that in actions for wrongful detention the plaintiff is entitled on default of the defendant in re-delivering the goods to him, to payment in the alternative of the value of the goods thus wrongfully detained as at the date of the verdict or judgment, in other words, at the date of the decree. We are, therefore, of opinion that the appellants were entitled to recover from the respondent the value of the said trucks which, as has been already stated, was Rs. 7,000 in the alternative, on default companymitted by the respondent in re-delivery of the same to the appellants. The next question to companysider is what damages are the appellants entitled to recover from the respondent by reason of the wrongful detention of the said trucks from August 1, 1942, up to the date of the decree. It is well settled that in an action for wrongful detention the plaintiff is entitled besides the re-delivery of the chattel or payment of its value in the alternative, also to damages for such wrongful detention. There is however numberdefinite criterion laid down by the decided cases as to what the measure of such damages should be. As was observed by Denning L. J. in Strand Electric Engineering Co., Ltd. 1 The question in this case is What is the proper measure of damages for the wrongful detention of goods? Does it fall within the general rule that the plaintiff only recovers for the loss he has suffered or 1 1952 2 Q.B. 246, 253. 103 within some other, and if so what, rule? It is strange that there is numberauthority upon this point in English law but there is plenty on the analogous case of detention of land. The rule there is that a wrongdoer, Who keeps the owner out of his land, must pay a fair rental value for it, even though the owner would number have been able to use it himself or to let it to anyone else. So also a wrongdoer who uses land for his own purpose without the owners companysent, as, for instance, for a fair ground, or as a, way-leave, must pay a reasonable hire for it, even though he has done numberdamage to the land at all Whitwham v. Westminster Brymbo Coal Company 1896 2 Ch. 538 . I see numberreason why the same principle should number apply to detention of goods. In that case certain portable switchboards were lent by the plaintiff to a Theatre Co., pending the manufacture and installation by the plaintiffs of permanent switchboards. The hiring out of portable switchboards was a numbermal part of the plaintiffs business and it was agreed between the plaintiff and the Theatre Co., on a subsequent date that the companypany should pay to the plaintiff the hiring charges at a certain rate per week. Later on the defendant took possession of the theatre and gave instructions that numberhing whatsoever must be removed, and the Theatre Co., disclaimed any responsibility for the plaintiffs hire equipment as from that date. The plaintiffs thereafter wrote a number of letters to the defendant demanding the return of their equipment but received neither their property number any satisfactory reply, and they issued a writ claiming the return of their equipment or its value, and damages for the period of its detention, which at the trial was shown to be for 43 weeks. Tile question that arose for companysideration was what was the quantum of damages which the plaintiffs were entitled to recover and it was held that in an action in detinue in respect of a chattel which the plaintiff, as part of his business, hires out to users, the plaintiff, if the defendant has during the period of detention made beneficial use of the chattel, is entitled to recover as damages the full market rate of hire for the whole period of detention. After setting out the passage above quoted Denning L. J. companytinued at page 254 If a wrongdoer has made use of goods for his own purpose, then he must pay a reasonable hire for them, even though the owner has in fact suffered numberloss. It may be that the owner would number have used the goods himself, or that he had a substitute readily available, which he used without extra companyt to himself. Nevertheless the owner is entitled to a reasonable hire. If the wrongdoer had asked the owner for permission to use the goods, the owner would be entitled to ask for a reasonable remuneration as the price of his permission. The wrongdoer cannot be better off by doing wrong than he would be by doing right. He must therefore pay a reasonable hire. Mr. B. Sen, who appeared on behalf of the respondent, urged before us on the authority of Anderson v. Passman 1 that as the gist of the-grievance is mere unlawful detention, the damages will be numberinal unless the plaintiff proves that he has suffered special damage. This position is, however, of numberavail to the respondent because it cannot be said that the appellants grievance here is merely in regard to the wrongful detention of the trucks. The appellants in this instant case have also claimed to recover from the respondent future damages from the date of detention till the date of delivery of the trucks and apart from any claim laid in special damages, these are damages which naturally flow from the wrongful act of the respondent and which the appellants would be entitled to recover in the event of number- delivery of the trucks to them by the respondent. This is certainly number a case of numberinal damages. As Earl of Halsbury L.C. pointed out in Owners of the Steamship Mediana v. Owners, Master and Crew of Lightship Comet 2 the unlawful keeping back of what belongs to another person is of itself a ground for real damages, number numberinal damages at all. The quantum of damages may be big or small but it 1 1835 7 C. P. 193. 2 1900 A.C. 113. 118. does number make any difference to the principle. The ,principle of assessing the damages is the same and that is that where by the wrongful act of one man something belonging to another is either itself so a injured as number to be capable of being used or is taken away so that it cannot be used at all, that of itself is a ground for damages. lbid p. 116 . In the case before us the appellants were the owners of the two trucks and they used to hire out the same to others. Hiring Out of the trucks was a regular business of theirs and if the said trucks had been re-delivered by the respondent to them on August 1, 1942, they would have immediately put the same to the user, viz., that of hiring them out to outsiders and earning thereby a certain sum by way of rent for each truck per day. The appellants might number have been able to hire them out for every day of the period of wrongful detention by the respondent, viz., from August 1, 1942 to July 7, 1944. As the learned judges of the High Court have observed, there might be days when the trucks would be out of use there might be days when the trucks would lie idle for repairs and overhaul and so forth that would only go to reduce the number of days for which the appellants would be entitled to recover the damages for such wrongful detention. If the learned judges of the High Court had on taking all the circumstances into companysideration arrived at the figure of Rs. 5,953 as the amount of hire which companyld have been reasonably earned by the appellants in the event of the re-delivery of the trucks by the respondent to them on August 1, 1942, their judgment in this behalf companyld number have been success-fully impeached. What they did, however, was to companyfine the appellants claim to Rs. 5,953 on the ground that the appellants had claimed that amount in the first instance and had paid the companyrt-fee on the same. They, therefore, took it that that sum of Rs. 5,953 represented a fair amount of damages for wrongful detention of the trucks according to the appellants. We are of opinion that the High Court was clearly in error in adopting this basis for the award of damages. The payment of companyrt-fee stamp on Rs. 5,953 was certainly number companyclusive against the appellants because on its being pointed out by the Office of the Registrar, the appellants paid an additional companyrt-fee stamp of Rs. 1,279- 11-0 on February 28, 1945, and that was done because the appellants did number companyfine their claim merely to the said sum of Rs. 5,953. If, according to the judgment of the learned judges of the High Court the appellants were entitled to damages for the wrongful detention of the said two trucks at the rate of Rs. 17 per day per truck from August 1, 1942 to July 7, 1944, they ought to have made a reasonable calculation of the number of days for which the trucks would have been put to use by the appellants and awarded damages to the appellants accordingly. This, however, they failed to do. In our opinion, the appellants are entitled to recover such damages from the respondent at the rate of Rs. 17 per truck per day for such reasonable period between August 1, 1942 to July 7, 1944, for which the appellants would have hired out the trucks to outside parties. The trucks were in a fairly good running companydition but were old models of 1938 and it will be quite reasonable to hold that they would have been in companymission approximately for one year during that period. Calculating the hire of these trucks at the rate of Rs. 17 per truck per day the total amount of damages which the appellants would be entitled to, recover from the respondent works out at Rs. 12,410. The appellants would therefore be entitled to recover over and above the sum of Rs. 5,953 already awarded to them by the High Court an additional sum of Rs. 6,457 by way of damages for wrongful detention of the said trucks by the respondent. We accordingly allow this appeal and pass in favour of the appellants, in addition to the enhanced decree which they have already obtained from the High Court, a decree against the respondent for Rs. 3,500 being the appreciated value of the said trucks together with interest thereon at 6 per annum from July 7, 1944, till this date as also for a sum of Rs. 6,457 by way of additional damages for wrongful detention of the said trucks, additional proportionate companyts both in the Trial Court as well as in the -High Court as also the companyts of this appeal, subject of companyrse to the payment of additional companyrt-fee for the excess amount awarded hereby.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 142 of 1956. Appeal by special leave from the judgment and order dated September 13, 1954, of the Labour Appellate Tribunal of India Calcutta Bench in Appeal No. Cal-87 of 1953. N. Sanyal, Additional Solicitor--General of India, B. Dadachanji, S. N. Andley and Rameshwar Nath, for the appellants. K. Chatterjee, for the respondents. 1957. November 5. The Judgment of the Court was delivered by BHAGWATI J.-This appeal with special leave arises out of an application made by the appellant to the Industrial Tribunal, Bihar under s. 33 of the Industrial Disputes Act, 1947 hereinafter referred to as the Act , seeking permission to discharge the respondents from its employ. The respondents were in the employ of the appellant and were staying in a two storeyed house in the city of Patna which had been rented by the appellant for housing its workmen. On November 20, 1952, an occurrence took place in the said house wherein the respondents were involved. Written reports of the said occurrence were sent on November 21, 1952, to the appellants Chief Engineer and the respondents were placed under suspension the same day. An industrial dispute was then pending between the parties i.e., the appellant and its workmen before the Industrial Tribunal, Bihar, and the appellant therefore made an application to the said Tribunal under s. 33 of the Act for permission to dismiss the respondents on the ground of misconduct as per cl. 17 b viii of the appellants Standing Orders. On November 27, 1952, the respondents also made an application before the said Tribunal under s. 33A of the Act inter alia on the ground that their suspension by the appellant as aforesaid was a breach of s. 33 of the Act. On December 6, 1952, the appellant made an application before the said Tribunal stating that on a reconsideration of the facts of the case of the respondents the original prayer for permission to dismiss the the respondents was number being pressed, and for the ends of justice it would be sufficient if the appellant was granted permission to discharge the respondents under cl. 14 a of the Standing Orders instead of the original prayer for dismissal under cl. 17 b viii thereof. This application was resisted by the respondents. The Industrial Tribunal, however, entertained the same and after hearing the parties duly made its award on May 14, 1953, dismissing the respondents application under s. 33A of the Act and granting the appellant permission to discharge the respondents from its employ with effect from the date of the order on payment to the respondents of one months pay in lieu of numberice within 15 days therefrom. The respondents carried an appeal against the said order of the Industrial Tribunal granting the appellants application under s. 33 of the Act before the Labour Appellate Tribunal of India, Calcutta. A preliminary objection was taken on behalf of the appellant before the Labour Appellate Tribunal that numbersubstantial question of law was involved and as such the appeal was number maintainable. The Labour Appellate Tribunal was of the opinion that the appellant had alleged misconduct against the respondents and companyld number be allowed to adopt the expedient of terminating their services by giving numberice for the requisite period or payment of salary in lieu of numberice and that the Industrial Tribunal, therefore, ought number to have entertained the application for amendment of the prayer of the original application in which the appellant wanted to dismiss the respondents for misconduct. This according to the Labour Appellate Tribunal was a substantial question of law and it therefore entertained the appeal. The Labour Appellate Tribunal thereafter companysidered whether the appel- lant had made out a case under cl. 17 b viii of the Standing Orders and came to the companyclusion that the respondents had number been guilty of any misconduct within the meaning of that clause and that therefore the order made by the Industrial Tribunal granting permission to the appellant to terminate the services of the respondents was liable to be set aside. In so far, however, as after obtaining the permission from the Industrial Tribunal the appellant had given numberice of discharge to the respondents, the Labour Appellate Tribunal expressed its inability to give the respondents any substantial relief either in the shape of reinstatement or companypensation. The appellant has companye up in appeal before us against this order of the Labour Appellate Tribunal. Shri H. N. Sanyal, appearing for the appellant, has urged in the fore-front the companytention that numberappeal from the order of the Industrial Tribunal lay to the Labour Appellate Tribunal under s. 7 of the Industrial Disputes Appellate Tribunal Act, 1950. He companytended that the said order was number a decision within the meaning of that expression in s. 7 and even assuming that it was so, the appeal neither involved any substantial question of law number was it a decision in respect of any of the matters specified in sub- s. 1 b of that section. The answer of Shri P. K. Chatterjee on behalf of the respondents was that the action of the appellant in the matter of the termination of the services of the respondents was punitive in character, that the discharge of the respondents for which permission was sought by the appellant was a punitive discharge, that such discharge was by reason of the alleged misconduct of the respondents falling within cl. 17 b viii of the Standing Orders and number within cl. 14 a thereof and that the substantial question of law which arose in the appeal was whether the appellant companyld be allowed to adopt the expedient of terminating the services of the respondents, without going through the procedure of submitting a charge- sheet to the respondents and holding a proper enquiry in the matter of those charges, by merely giving numberice for the requisite period or payment of salary in lieu of numberice and thus resorting to el. 14 a of the Standing Orders instead of cl. 17 b viii of the same. The other answer made by Shri P. K. Chatterjee was that having regard to the definition of the term retrenchment to be found in s. 2 oo of the Act the discharge of the respondents by the appellant really amounted to retrenchment and retrenchment being one of the matters specified in sub-s. 1 b of s. 7 of the Industrial Disputes Appellate Tribunal Act, 1950, the respondents had a right of appeal to the Labour Appellate Tribunal. It is necessary, therefore, to appreciate what was sought to be done by the appellant when it made the application before the Industrial Tribunal on December 6, 1952. This application has been described by the Labour Appellate Tribunal as an application for amendment of the original application which had been filed by the appellant on November 21, 1952, for permission to dismiss the respondents from its employ as per el. 17 b viii of the Standing Orders. It must be numbered, however, that what the appellant purported to do by its application of December 6, 1952, was, in effect, to substitute another application asking for permission to discharge the respondents from its employ under el. 14 a of the Standing Orders, thus abandoning the relief which it had prayed for in the original application. The application dated December 6, 1952, was thus, in substance, a new application made by the appellant to the Industrial Tribunal, numberdoubt relying upon the facts and circumstances which were set out in the original application but asking for the permission of the Industrial Tribunal to discharge the respondents from its employ under cl. 14 a of the Standing Orders instead of dismissing them from its employ under el. 17 b viii thereof. We do number see how it was number companypetent to the Industrial Tribunal to allow the appellant to do so. If the appellant bad been actuated by any oblique motives and wanted to evade the companysequences of its number having held a proper enquiry, after submitting a charge-sheet to the respondents one companyld have understood the criticism made by the Labour Appellate Tribunal in regard to the same. The Industrial Tribunal, however, expressly recorded the finding that the application for leave to discharge the respondents from its employ was bona fide and what the appellant did by making the application dated December 6, 1952, was actuated by an honest motive of exercising its right to discharge the respondents under el. 14 a of the Standing Orders instead of visiting upon the respondents the penalty of dismissing them from its employ under el. 17 b viii thereof. The discharge of the respondents was a discharge simpliciter in exercise of the rights of the employer under el. 14 a of the Standing Orders and was number a punitive discharge under el. 17 b viii thereof and if it was merely a discharge simpliciter, then, numberobjection companyld be taken to the same and the appellant would be well within its rights to do so, provided, however, that it was number arbitrary or apricious but was bona fide. The only question relevant to be companysidered by the Industrial Tribunal would be that in taking the step which it did the appellant was number guilty of any unfair labour practice or victimization. If the Industrial Tribunal did number companye to a companyclusion adverse to the appellant on these companynts, it would have numberjurisdiction to refuse, the permission asked for by the appellant. Once the Industrial Tribunal was of opinion that the application dated December 6, 1952, and the discharge of the respondents for which . the permission of the Industrial Tribunal was sought were in the honest exercise of the appellants rights, numberquestion of law, much less a substantial question of law companyld arise in the appeal filed by the respondents against the decision of the Industrial Tribunal and the Labour Appellate Tribunal was clearly in error when it entertained the appeal. In view of the above finding, we do number propose to deal with the companytention that the order passed by the Industrial Tribunal under s. 33 of the Act is number a decision within the meaning of that term in s. 7 of the Industrial Disputes Appellate Tribunal Act, 1950. The argument that the discharge of the respondents though patently it was a discharge simpliciter was, in substance, retrenchment within the meaning of the definition companytained in s. 2 oo of the Act is equally untenable, for the simple reason that the term retrenchment was for the first time defined in the manner in which it has been done by an Ordinance promulgated in October 1953 which was followed by Act 43 of 1953 which was published in the Gazette of India on December 23, 1953. The Industrial Tribunal made its order granting the permission under s. 33 of the Act on May 14, 1953, so that, this definition of the term retrenchment companyld number apply to the facts of the present case. If, therefore, at the relevant period the discharge simpliciter companyld number be deemed to be retrenchment of the respondents by the appellant, the decision of the Industrial Tribunal companyld number be said to be one in respect of any of the matters specified in sub-s. 1 b of s. 7 of the Industrial Disputes Appellate Tribunal Act, 1950. In that view also numberappeal companyld lie from the decision of the Industrial Tribunal to the Labour Appellate Tribunal. It must be observed that neither of these two points was taken by the respondents either in the proceedings before the Industrial Tribunal or the Labour Appellate Tribunal number was either of them mentioned in the statement of case filed by the respondents in this Court. They were taken for the first time in the arguments advanced before us by Shri P. K. Chatterjee. We have, however, dealt with the same because we thought that we should number deprive tile respondents of the benefit of any argument which companyld possibly be advanced in their favour. We are, therefore, of opinion that numberappeal lay from the decision of the Industrial Tribunal to the Labour Appellate Tribunal, that the Labour Appellate Tribunal had numberjurisdiction to interfere with the order made by the Industrial Tribunal granting the appellant permission to discharge the respondents under s. 33 of the Act and that the decision of the Labour Appellate Tribunal is liable to be set aside. We accordingly allow the appeal, set aside the decision of the Labour Appellate Tribunal and restore the order made by the Industrial Tribunal, Bihar, on date May 14, 1953.

Case appeal was accepted by the Supreme Court

ORIGINAL JURISDICTION Petition No. 115 of 1956, and Petition No. 132 of 1956. Petitions under Article 32 of the Constitution of India for the enforcement of fundamental rights. D. Sharma, for the petitioners. K. Daphtary, Solicitor-General of India, Porus Mehta and R. H. Dhebar, for the respondents, 1957. February 13. The Judgment of the Court was delivered by K. DAS J.-These two petitions for the issue of appropriate writs restraining the respondents from prosecuting and trying the two petitioners on certain criminal charges in circumstances to be presently stated, raise the same question of law and have been heard together. This judgment will govern them both. Baij Nath Prasad Tripathi, petitioner in Petition No. 115 of 1956, was a Sub-inspector of Police in the then State of Bhopal. He was prosecuted in the Court of Shri B. K. Puranik, Special Judge, Bhopal, and companyvicted of offences under s. 161, Indian Penal Code, and s. 5 of the Prevention of Corruption Act, 1947. He was sentenced to nine months rigorous imprisonment on each companynt. He preferred an appeal against the companyviction and sentences to the Judicial Commissioner of Bhopal. The Judicial Commissioner held by his judGment dated March 7, 1956, that numbersanction according to law had been given for the prosecution of the -petitioner and the Special JudGe had numberjurisdiction to take companynizance of the case the trial was accordingly ab initio invalid -and liable to be quashed. He accordingly set aside the companyviction and quashed the entire proceedings before the Special Judge. He then observed The parties would thus be relegated to the position as if numberlegal charge-sheet had been submitted against the appellant. On April 4, 1956, the Chief Commissioner of Bhopal passed an order under s. 7 2 of the Criminal Law Amendment Act, 1952 No. XLVI of 1952 that the petitioner shall be tried by Shri S. N. Shri- vastava, Special Judge, Bhopal, for certain offences under the Prevention of Corruption Act read with S. 161, Indian Penal Code. The case of the petitioner is that he cannot be prosecuted and tried again for the same offences under the aforesaid order of April 4, 1956. Sudhakar Dube, petitioner in Petition No. 132 of. 1956, was also a Sub-Inspector of Police in the then State of Bhopal. He was also prosecuted in the Court of Shri B. K. Puranik, Special Judge, Bhopal, on a charge of having accepted illegal gratification for- showing official favour to one Panna Lal. The learned Special Judge by an order dated January 10, 1956, came to the companyclusion that numberlegal sanction for the prosecution of the petitioner had been given by the companypetent authority and the sanction given by the Inspector. General of Police was number valid in law he therefore held that the whole trial was null and void and he companyld number take companynizance of the offences in question. Accordingly he quashed the proceedings. On February 7, 1956, the Chief Secretary to the Government of Bhopal accorded fresh sanction for the prosecution of the petitioner for offences under s. 161, Indian Penal Code, and s. 5 of the Prevention of Corruption Act. The petitioner then moved this Court for appropriate writs restraining the respondents from prosecuting and trying him for the offences stated in the fresh sanction aforesaid. On behalf of both the petitioners the companytention is that by reason of cl. 2 of Art. 20 of the Constitution and s. 403 of the Code of Criminal Procedure, the petitioners cannot number be tried for the offences in question. It is necessary to read here some of the relevant sections bearing on the point at issue. Section 6 of the Criminal Law Amendment Act, 1952 prior to the amendment made in 1955 , so far as is relevant for our purpose, is in these terms 6. 1 The State Government may, by numberification in the Official Gazette, appoint as many special Judges as may be necessary for such area or areas as may be specified in the numberification Co try the following offences, namely- a an offence punishable under section 161, section 165, or section 165-A of the Indian Penal Code Act XLV of 1860 , or sub-section 2 of section 5 of the Prevention of Corruption Act, 1947 II of 1947 b any companyspiracy to companymit or any attempt to companymit or any abetment of any of the offences specified in clause a. Sub-section 1 of s. 7 of the same Act lays down 7. 1 Notwithstanding anything companytained in the Code of Criminal Procedure, 1898 Act V of 1898 or in any other law the offences specified in subsection I of section 6 shall be triable by special Judges only. The same section also states that when trying any case, a special Judge may also try any offence other than an offence specified in s. 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial. It is number necessary for our purpose to read the other sections of the Criminal Law Amendment Act, 1952. We then go to the Prevention of Corruption Act, 1947, section 6 whereof is relevant for our purpose. That section is in these terms 6. 1 No Court shall, take companynizance of an offence punishable under section 16l or section 165 of the Indian Penal Code or under sub-section 2 of section 5 of this Act, alleged to have been companymitted by a public servant except with the previous sanction, a in the case of a person who is employed in companynection with the affairs of the Union and is number removable from his office save by or with the sanction of the Central Government of the Central Government b in the case of a person who is employed in companynection with the affairs of a State and is number removable from his office save by or -with the sanction of the State Government of the State Government c in the case of any other person, of the authority companypetent to remove him from his office. Where for any reason whatsoever any doubt arises whether the previous sanction as required under sub-section 1 should be given by the Central or State Government or any other authority, such sanction shall be given by that Government or authority which would have been companypetent to remove, the public servant from his office at the time when the offence was alleged to have been companymitted. It is under this section that sanction was necessary for the prosecution of the petitioners. Clause 2 of Art. 20 of the Constitution, on which the petitioners rely, states No person shall be prosecuted and punished for the same offence more than once. Section 403 1 of the Code of Criminal Procedure, on which learned companynsel for the petitioners has placed the greatest reliance, is in these terms A person who has once been tried by a Court of companypetent jurisdiction for ail offence and companyvicted or acquitted of such offence shall, while such companyviction or acquittal remains in force, number be liable to be tried again for the same offence, number on the same facts for any other offence for which a different charge from the one made against him might have been made under section 236, or for which he might have been companyvicted under section 237. Now, it is necessary to state that the point taken by learned companynsel for the petitioners is really companycluded by three decisions- a one of the Privy Council, b another of the Federal Court and c the third of this Court itself. The Privy Council decision is in Yusofalli Mulla v. The King 1 the Federal Court decision in Basdeo Agarwalla v. King- Emperor 2 and the decision of this Court number yet reported was given in Budha Mal v. State of Delhi 3 on October 3, 1952. The Privy Council decision is directly in point, and it was there held that the whole basis of s. 403 1 was that the first trial should have been before a Court companypetent to hear and determine the case and to record a verdict of companyviction or acquittal if the Court was number so companypetent, as for example where the required sanction for the prosecution was number obtained, it was irrelevant that it was companypetent to try other cases of the same class or indeed the case against the particular accused in different circumstances, for example if a sanction had been obtained. So is the decision of this Court where the following observations were made with regard to the point in question Section 403, Criminal Procedure Code, applies to cases where the acquittal order has been made by a Court of companypetent jurisdiction but it does number bar A.I.R. 1949 P.C. 264. 2 1945 F.C. R. 93. Criminal Appeal No. 17 Of 1952 decided on October 3, 1952. a retrial of the accused in cases where such an order has been made by a companyrt which had numberjurisdiction to take companynizance of the case. It is quite apparent on this record that in the absence of a valid sanction the trial of the appellant in the first instance was by a magistrate who had numberjurisdiction to try him. After the pronouncements made in the decisions referred to above, it is really unnecessary to embark on a further or fuller discussion of the point raised, except merely to state that we have heard learned companynsel for the petitioners who made a vain attempt with a crusading pertinacity worthy of a better cause, to show that the Privy Council decision was wrong and the decision of this Court required reconsideration, and having heard learned companynsel in full, we are of the view that the decisions referred to above state the legal position companyrectly. It is clear beyond any doubt that el. 2 of Art. 20 of the Constitution has numberapplication in these two cases. The petitioners are number being prosecuted and punished for the same offence more than once,, the earlier proceedings having been held to be null and void. With regard to s. 403, Code of Criminal Procedure, it is enough to state that the petitioners were number tried,- in the earlier proceedings, by a Court of companypetent jurisdiction, number is there any companyviction or acquittal in force within the meaning of s. 403. 1 of the Code, to stand as a bar against their trial for the same offences. Learned companynsel for the petitioners invited our attention to ss. 190, 191, 192, 529 and 530 of the Code of Criminal Procedure and submitted that in certain circumstances the Code drew a distinction between jurisdiction and I taking companynizance. The whole fabric of the argument of learned companynsel was founded on this distinction. Assuming, however, that in certain cases one Magistrate may take companynizance and another Magistrate may try an accused person, it is difficult to appreciate how any Court can try the petitioners of these cases in the absence of a sanction in view of the mandatory provisions of s. 6 of the Prevention of Corruption Act, 1947. If numberCourt can take companynizance of the offences in question without a legal sanction, it is obvious that numberCourt can be said to be a Court of companypetent jurisdiction to try those offences and that any trial in the absence of such sanction must be null and void, and the sections of the Code on which learned companynsel 1 for the petitioners relied have really number bearing on the matter. Section 530 of the Code is really against the companytention of learned companynsel, for it states, inter alia, that if any Magistrate number being empowered by law to try all offender, tries him, then the proceedings shall be void. Section 529 e is merely an exception in the matter of taking companynizance of an offence under s. 190, sub-s. 1 , cls. a and b it has numberbearing in a case where sanction is necessary and numbersanction in accordance with law has been obtained. As part of his arguments, learned companynsel for the petitioners referred to certain observations made by Braund J. in a decision of the Allahabad High Court, Basdeo v. Emperor 1 , where the learned Judge drew a distinction between taking companynizance and jurisdiction. The distinction was drawn in a case where a Magistrate duly empowered to companymit cases to the Sessions Court companymitted ail accused person to the Court of Session in disregard of the provisions of s. 254 of the Code of Criminal Procedure, and the question was whether the irregularity so companymitted rendered the Sessions Court incompetent to try the case. The facts there were entirely different from the facts of the present cases and there was numberoccasion number necessity for companysidering such mandatory provisions as are companytained in s. 6 of the Prevention of Corruption Act. We do number think that the observations made in that case can be pressed in service in support of the argument of learned companynsel for the petitioners in these cases, treating those observations as though they laid down any abstract propositions of law number dependent on the companytext of the facts in companynection with which they were made. Out of deference to learned companynsel for the petitioners, we have indicated and companysidered very briefly the arguments advanced before us. As we have said A.I.R. T045 All. 340. before, - the point is really companycluded by decisions of the highest tribunal, decisions which companyrectly lay down the law.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeals Nos. 24 and 25 of 1957. Appeals by special leave from the judgment and order dated July 25, 1956, of the Madras High Court in Criminal Appeals Nos. 247 248 of 1956 and Referred Trial No. 41 of 1956 arising out of the judgment and order dated March 28, 1956 of the Court of Sessions, East Tanjore Division at Nagapatam, in care S.C. No. 5 of 1956. J. Umrigar and S. Subramanian, for the Appellants. S. Kailasham and T. M. Sen, for the respondent. 1957. April 12. The Judgment of the Court was delivered by SINHA J.-These two appeals by special leave, which arise out of the same occurrence, are directed against the Judgment and Order dated July 25, 1956, of the Madras High Court, companyfirming the sentence of death passed by the Court of Sessions, East Tanjore Division, at Nagapattinam, under s. 302 of the Indian Penal Code, against appellant in Criminal Appeal No. 24 of 1957, for the murder of Kannuswami, and modifying the order of companyviction and sentence under s. 302, read with s. 109 of the Indian Penal Code, to one under s. 326, Indian Penal Code, and reducing the sentence of imprisonment for life to one for 5 years, in respect of the appellant in Criminal Appeal No. 25 of 1957. In the companyrse of this Judgment, we shall call the appellant in Criminal Appeal No. 24 of 1957, as the first appellant , and the appellant in Criminal Appeal No. 25 of 1957, as the second appellant . The occurrence which was the subject-matter of the charges against the two appellants took place at about 11-30 p.m. on November 10, 1955, at Muthupet, in front of the tea stall of Kannuswami, husband of Shrimati Dhanabagyam-prosecution witness No. 1who will be referred to, in the companyrse of this judgment, as the first witness , and who is the principal witness for the prosecution, because, as will presently appear, the prosecution case and the companyvictions and sentences of the appellants depend entirely upon her testimony. The occurrence took place in the immediate vicinity of a cinema-house in which the second show was in progress at the time of the alleged companyd-blooded murder. As there were numbercustomers at that time at the tea shop run by Kannuswami, his wife called him for his dinner to be served to him behind the tea stall, as the husband and wife used to live there. Kannuswami was about to attend to the call for dinner when an old man came into the shop and asked for a cup of tea. When Kannuswami got busy preparing the tea, the two appellants rushed into the premises. The old man-the intending customer-naturally ran away, and the two accused dragged Kannuswami out of the shop on to the road-side and the first appellant gave him several blows on the front part of his body in the region of the chest with an aruval-a cutting instrument about 2 feet long including the handle. Kannuswami fell down on his back and cried out for help. His wife, the only other inmate of the house, tried to companye to his rescue by raising and putting his head into her lap after the two accused had left him. But soon after, perhaps, realising that Kannuswami was number dead as a result of the first blows, as deposed by the wife, both the accused returned. Kannuswamis wife who figures in companyrt as the sole witness to the killing, placed his head on the ground and went and stood on the steps of the tea stall. The first appellant this time, made the body of Kannuswami lie with face downwards and gave a number of cuts in the region of the head, the neck and back. These injuries were such as to cause instantaneous death. At the time of the second assault, according to the evidence of the first witness, Shunmuga Thevar-Prosecution Witness No. 3, one of the proprietors of the cinema-housecame and remonstrated with the accused but to numberpurpose. After inflicting the injuries, both the accused ran away. According to the testimony of the first witness, it was the first appellant, the second accused A-2 in therecord , who inflicted cutting injuries with the aruval. The second appellant, the first accused A-1 inthe record , was standing nearby at the time the cutting injuries were inflicted. There were two electric lights burning in the tea shop, a Panchayat Board light burning on the road, as also a light burning on the pathway leading to the cinema-house. The wife of the deceased, finding her husband thus murdered, went and told Ganapathi-Prosecution Witness No. 4--who had a tea stall on the other side of the road, and informed him as to what had taken place. He asked her to lodge information of the occurrence at the Police Station. She then went to the Mathupet Police Station, but found it shut. She went to the house of the Sub-Inspector of Police, who took her to the Police Station, and recorded her statement as the first information report Exhibit P. 1 . After recording the first information report, the SubInspector came along with the first informant to the scene of occurrence. He held an inquest early in the morning. At the trial, the Prosecution examined, besides the widow of the murdered man P.W. 1 , P.W. 2-an assistant in the tea shop of Ganapathi Thevar, P.W.3-one of the proprietors of the cinema-house and P.W. 4Ganapathi who kept another tea stall near the cinemahouse, in support of the prosecution case. P.W. 2Singaram -testified to the occurrence and stated that he had seen Vadivelu Cut Kannuswami and Chinniah standing by the side of Vadivelu, a few feet away but he added that the accused persons were number those company- cerned with the crime though they bore the same names. The Public Prosecutor was permitted to cross-examine this witness who admitted that he knew that the Police were searching for the accused in the dock and that he did number tell the Police that these were number the persons who had companymitted the murder. He went to the length of admitting that he did number tell anybody that the accused in the dock were number the persons who had companymitted the murder and that it was in the companymittal companyrt that he stated, for the first time, that the accused persons were number companycerned with the crime. He also admitted that at the time of the occurrence, lights were burning at the place of occurrence, in the tea shop and in the theatre. P.W. 3, one of the proprietors of the cinema-house, when examined in companyrt, admitted that he had been examined by the police two days after the occurrence, but stated that he did number tell the Police that he had seen the accused assaulting Kannuswami. It appears that, though the record of the examination-in-chief of this witness would itself indicate that the Public Prosecutor had, put questions to him in the nature of cross- examination, yet it is number recorded, unlike the record of the depositions of P.W. 2 and P.W. 4, that this witness had been declared hostile and the Public Prosecutor had been permitted to cross-examine him. That appears to be a slip of the learned Sessions Judge, as he had been so treated even in the companymittal companyrt. The Investigating Sub-Inspector, P.W. 14, stated, with reference to his diary, that P.W. 3 had stated before him that he had seen accused No. 2 cutting the deceased on the head and neck with an aruval, and accused No. I standing by the side of the second accused. Witness No. 4 for the Prosecution-Ganapathi-who ran a tea stall near the cinema-house, about 50 to 60 feet away from the tea stall of the deceased Kannuswami, stated in companyrt that the first witness came to him weeping and saying that Chinniah and Vadivelu Thevar had cut her husband, but added that the two accused in companyrt were number those persons. Thus, whatever may have been the previous statements of the prosecution witnesses 2 to 4, aforesaid, their evidence in companyrt does number directly support the prosecution case. The orders of companyviction and sentence, as passed by the companyrts below, as indicated above, rest solely on the testimony of the first witness. It has been argued by the, learned companynsel for the appellants that the companyviction and sentences of the appellants should number, be upheld because they rest on the sole testimony of the first witness, particularly, because, it is further argued, her testimony is number free from all blemish. In this companynection, her statement in companyrt that it was the second accused first appellant who gave the number of cut injuries with the aruval to the deceased Kannuswami, was challenged in crossexamination. She has been cross- examined with reference to her statement Exhibit D-2 recorded by the companymitting Magistrate, and she has categorically stated Accused 1 had numberweapon of any kind with him. He did number give any cut. I have number stated in the companymittal companyrt that accused 1 companytinued to cut even after Shanmugham Thevar asked him number to cut. Exhibit D-2 is in these terms Even while he was asking number to cut, accused 1 was cutting. Soon after, accused 1 stopped cutting and went away. With reference to the statement of the first witness, as recorded in Exhibit D-2, the learned Sessions Judge has observed that it was a mistake of recording by the companymitting Magistrate. We have looked into the whole -evidence of the first witness, as recorded by the companymitting Magistrate-not printed in the record, but supplied to us by the learned companynsel for the appellants-and in our opinion, there is numberdoubt that the learned Sessions Judge was companyrect in his companyclusion that the recording by the Magistrate is defective in the sense that accused 1 has been recorded in place of accused 2, inasmuch as, throughout her deposition, the first witness had companysistently stated that it was accused 2 who actually used the deadly weapon against her husband and that accused I was only aiding and abetting him and lending him strength by his presence. That this companyclusion is well-founded, is also substantiated by the state of the record of the appeal in the High Court. Each of the two appellants in the High Court filed a separate Memorandum of Appeal through his own companynsel. In neither of the Memoranda of Appeal, any ground has been taken that the first witness had materially companytradicted herself with reference to her previous statement in the companymittal companyrt. Her testimony was assailed only as interested, artificial and unnatural. It is number even suggested that the learned Sessions Judges companyclusion in respect of the recording by the companymitting Magistrate Exhibit D-2 was number based on any material. When the matter was argued before a Bench of the High Court, there is numberindication in the judgment that any point was sought to be made of this alleged serious discrepancy in the statement of the first witness at different stages. In the High Court, it was sought to be argued only that she was an interested witness though her testimony throughout had been companysistent, as will appear from the following observations of the High Court To prove that it was the two accused that caused these injuries to the deceased, the prosecution put forth as many as four witnesses. Of these four witnesses, P.Ws. 2, 3 and 4 turned hostile both in the companymittal companyrt as also in the Sessions Court. The only witness that remained companystant throughout was P.W. I who is numberother than the wife of the deceased. The same was the position with reference to the petition for leave to appeal to this Court filed in the High Court. It was a joint petition on behalf of both the appellants, and as many as 13 grounds had been taken. There is number even a suggestion that the testimony of the first witness was vitiated by any such discrepancy as has been sought to be made out in this Court. It was after the High Court refused to grant the necessary certificate that for the first time, in the petition for special leave to appeal, filed in this Court, the ground is taken that the High Court failed to appreciate that the testimony of the first witness was untrustworthy for the reason that there was the alleged discrepancy between her statement in the companymittal companyrt and in the Court of Sessions. Thus, it is abundantly clear that the finding of the learned Sessions Judge about the mistake in recording the evidence of the first witness, by the companymittal companyrt, has number been challenged at any stage in the companyrt below. The second ground of attack against the veracity of the first witness is that she had stated that Shanmugham Thevar- Prosecution Witness No. 3-had also seen the first appellant giving the deadly blows to her husband, and that the assailant companytinued giving his blows in spite of protests of W. 3. This argument proceeds upon the assumption that Prosecution Witness No. 3 is telling the truth and that, therefore, his evidence effectively companytradicts that of the first witness. P.W. 3 was, as indicated above, cross- examined by the Public Prosecutor with reference to his previous statement before the Investigating Police Officer W. 14 . P.W. 14 has stated that before him P.W. 3 had stated just the companytrary Of what he stated in companyrt. The statements of P.W. 3 at the earlier stage, before the Police, and later when examined in companyrt, may or may, number have been false, but certainly both cannot be true. Hence, it cannot be said that the evidence of P.W. 3 in companyrt was the true version. That being so, his evidence in companyrt is number strong enough to wipe out the evidence of the first witness on the ground that it is companytrary to what P.W. 3 had stated. It is, thus, clear that numbere of the grounds, urged in support of the companytention that the evidence of the first witness is unreliable, has been made out. On the other hand, the first witness, being the most important witness from the point of view of the prosecution, was put to a severe test in her cross-examination. She has frankly made admissions in her cross-examination, which throw a very lurid light on the past life of her deceased husband. She admitted that he had been transported for life for having companymitted a murder and that after his release also, he had been sent to jail twice for having caused cut injuries to others. If the first witness were inclined to tell falsehoods or at least to companyceal her husbands past, she companyld have taken shelter behind failing memory or want of information number an uncommon characteristic of prevaricating witnesses. Her evidence, read as a whole, rings quite true, and we have numberhesitation in acting upon it. It is true that her evidence in companyrt has been sought to be companytradicted by the evidence of P.Ws. 2 to 4, but the latter set of witnesses have been shown to be number reliable because they appear to have made different statements at different stages for reasons of their own. Their testimony does number inspire companyfidence and we cannot, therefore, brush aside the testimony of the first witness as companypared to the evidence of P.Ws. 2 to 4. The testimony of the first witness is companysistent with what he has stated in her first information report at the Police Station without any avoidable delay, within less than an hour of the occurrence. It cannot, therefore, be said that her statement in companyrt, is an afterthought, or the result of tutoring by other interested persons. Her story of the double attack, first on the-front, and subsequently on the- back and side of the victim, is also companysistent with the medical evidence as deposed to by the Medical Officer-P.W. 8. It is number necessary to set out in detail the dozen incised gaping. wounds on the person of the deceased, which are all set out in extenso in the judgment of the learned Sessions Judge who has written a very careful and satisfactory judgment. Alternatively, it has been argued on behalf of the appellants that it is number safe to companyvict the appellants on the testimony of a single witness even though she may number have been demonstrated to have been a lying witness. It has number even been claimed by companynsel for the appellants that this is a rule of law. He has only put it on the ground of prudence that, ordinarily, the companyrt should number, in a case involving a charge of murder, companyvict an accused person upon the testimony of a single witness. In this companynection, our attention was drawn to the observations of their Lordships of the Judicial Committee of the Privy Council in the case of Mohamed Sugal Esa Mamasan Rer Alalah v. The, King 1 . In that case, their Lordships looked for companyroboration of the testimony of a single witness in a murder case. It is true that in that case, the companyrt had to look for and found companyroboration of the testimony of the single witness in support of the murder charge, but the testimony of that witness suffered from two infirmities, namely The witness was a girl of about 10 or 11 years at the time of occurrence. The girl witness had number been administered oath because the Court did number companysider that she was able to understand the nature of the oath though she was companypetent to testify. That was a case from Somaliland to which the provisions of the Indian Evidence Act 1 of 1872 and of the Indian Oaths Act X of 1873 , had been made applicable. Special leave had been granted to appeal to His Majesty-in-Council on the ground that the local companyrts had admitted and acted upon the unsworn evidence of a girl of 10 or 11 years of age. Their Lordship upheld the companyviction and sentence of death, holding that the A.I.R. 1946 P.C. 3. evidence, such as it was, was admissible. In the companyrse of their Judgment, they made the following observations at pp. 5-6 which are pertinent to the present companytroversy It was also submitted on behalf of the appellant that assuming the unsworn evidence was admissible the Court companyld number act upon it unless it was companyroborated. In England where provision has been made for the reception of unsworn evidence from a child it has always been provided that the evidence must be companyroborated in some material particular implicating the accused. But in the Indian Act there is numbersuch provision and the evidence is made admissible whether companyroborated or number. Once there is admissible evidence a companyrt can act upon it companyroboration, unless required by statute, goes only to the weight and value of the evidence. It is a sound rule in practice number to act on the uncorroborated evidence of a child, whether sworn or unsworn, but this is a rule of prudence and number of law. The decision of this Court in the case of Vemireddy Satyanarayan Reddy and three others v. The State of Hyderabad 1 was also relied upon in support of the companytention that in a murder case the companyrt insists on companyroboration of the -testimony of a single witness. In the said reported decision of this Court, P.W. 14 has been described as a dhobi boy named Gopai. He was the only person who had witnessed the murder and his testimony had been assailed on the ground that he was an accomplice. Though this Court repelled the companytention that he was an accomplice, it held that his position was analogous to that of an accomplice. This Court insisted on companyroboration of the testimony of the single witness number on the ground that his was the only evidence on which the companyviction companyld be based, but on the ground that though he was number an accomplice, his evidence was analogous to that of an accomplice in the peculiar circumstances of that case as would be clear from the following observations at p. 252 1 1956 S.C.R. 247. is Though he was number an accomplice, we would still want companyroboration on material particulars in this particular case, as he is the only witness to the crime and as it would be unsafe to hang four people on his sole testimony unless we feel companyvinced that he is speaking the truth. Such companyroboration need number, however, be on the question of the actual companymission of the offence if this was the requirement, then we would have independent testimony on which to -act and there would be numberneed to rely on the evidence of one whose position may, in this particular case, be said to be somewhat analogous to that of an accomplice, though number exactly the same. It is number necessary specifically to numberice the other decisions of the different High Courts in India in which the companyrt insisted on companyroboration of the testimony of a single witness, number as a proposition of law, but in view of the circumstances of those cases. On a companysideration of the relevant authorities and the provisions of the Indian Evidence Act, the following propositions may be safely stated as firmly established As a general rule, a companyrt can and may act on the testimony of a single witness though uncorroborated. One credible witness outweighs the testimony of a number of other witnesses of indifferent character. Unless companyroboration is insisted upon by statute, companyrts should number insist on companyroboration except in cases where the nature of the testimony of the single witness itself requires as a rule of prudence, that companyroboration should be insisted upon, for example in the case of a child witness, or of a witness whose evidence is that of an accomplice or of an analogous character. Whether companyroboration of the testimony of a single witness is or is number necessary, must depend upon facts and circumstances of each case and numbergeneral rule can be laid down in a matter like this and much depends upon the judicial discretion of the Judge before whom the case companyes. In view of these companysiderations, we have numberhesitation in holding that the companytention that in a murder case, the companyrt should insist upon plurality of witnesses, is much too broadly stated. Section 134 of the Indian Evidence Act has categorically laid it down that numberparticular number of witnesses shall in any case be required for the proof of any fact. The legislature determined, as long ago as 1872, presumably after due companysideration of the pros and companys, that it shall number be necessary for proof or disproof of a fact, to call any particular number of witnesses. In England, both before and after the passing of the Indian Evidence Act, 1872, there have been a number of statutes as set out in Sarkars I Law of Evidence -9th Edition, at pp. 1 100 and 1 101, forbidding companyvictions on the testimony of a single witness. The Indian Legislature has number insisted on laying down any such exceptions to the general rule recognized in s. 134 quoted above. The section enshrines the well recognized maxim that Evidence has to be weighed and number companynted. Our Legislature has given statutory recognition to the fact that administration of justice may be hampered if a particular number of witnesses were to be insisted upon. It is number seldom that a crime has been companymitted in the presence of only one witness, leaving aside those cases which are number of uncommon occurrence, where determination of guilt depends entirely on circumstantial evidence. If the Legislature were to insist upon plurality of witnesses, cases where the testimony of a single witness only companyld be available in proof of the crime, would go unpunished. It is here that the discretion of the presiding judge companyes into play. The matter thus must depend upon the circumstances of each case and the quality of the evidence of the single witness whose testimony has to be either accepted or rejected. If such a testimony is found by the companyrt to be entirely reliable, there is numberlegal impediment to the companyviction of the accused person on such proof. Even as the guilt of an accused person may be proved by the testimony of a single witness, the innocence of an accused person may be established on the testimony of a single witness, even though a companysiderable number of witnesses may be forthcoming to testify to the truth of the case for the prosecution. Hence, in our opinion, it is a sound and well- established rule of law that the companyrt is companycerned with the quality and number with the quantity of the evidence necessary for, proving or disproving a fact. Generally speaking, oral testimony in this companytext may be classified into three categories, namely Wholly reliable. Wholly unreliable. Neither wholly reliable number wholly unreliable.In the first category of proof, the companyrt should have numberdifficulty in companying to its companyclusion either way-it may companyvict or may acquit on the testimony of a single witness, if it is found to be above reproach or suspicion of interestedness, incompetence or subornation. In the second category, the companyrt, equally has numberdifficulty in companying to its companyclusion. It is in the third category of cases, that the companyrt has to be circumspect and has to look for companyroboration in material particulars by reliable testimony, direct or circumstantial. There is another danger in insisting on plurality of witnesses. Irrespective of the quality of the oral evidence of a single witness, if companyrts were to insist on plurality of witnesses in proof of any fact, they will be indirectly encouraging subornation of witnesses. Situations may arise and do arise where only a single person is available to give evidence in support of a disputed fact. The companyrt naturally has to weigh carefully such a testimony and if it is satisfied that the evidence is reliable and free from all taints which tend to render oral testimony open to suspicion, it becomes its duty to act upon such testimony. The law reports companytain many precedents where the companyrt had to depend and act upon the testimony of a single witness in support of the prosecution. There are exceptions to this rule, for example, in cases of sexual offences or of the testimony of an approver both these are cases in which the oral testimony is, by its very nature, suspect, being that of a participator in crime. But, where there are numbersuch exceptional reasons operating, it becomes the duty of the companyrt to companyvict,if it is satisfied that the testimony of a single witness is entirely reliable. We have, therefore, numberreasons to refuse to act upon the testimony of the first witness, which is the only reliable evidence in support of the prosecution. Lastly, it was urged that assuming that the companyrt was inclined to act upon the testimony of the first witness and to record a companyviction for murder as against the first appellant, the companyrt should number impose the extreme penalty of law and in the state of the record as it is, the lesser punishment provided by law should be deemed to meet the ends of justice. We cannot accede to this line of argument. The first question which the companyrt has to companysider in a case like this, is whether the accused has been proved, to the satisfaction of the companyrt, to have companymitted the crime. If the companyrt is companyvinced about the truth of the prosecution story, companyviction has to follow. The question of sentence has to be determined, number with reference to the volume or character of the evidence adduced by the prosecution in support of the prosecution case, but with reference to the fact whether there are any extenuating circumstances which can be said to mitigate the enormity of the crime. If the companyrt is satisfied that there are such mitigating circumstances, only then, it would be justified in imposing the lesser of the two sentences provided by law. In other words, the nature of the proof has numberhing to to with the character of the punishment. The nature of the proof can only bear upon the question of companyviction-whether or number the accused has been proved to be guilty. If the companyrt companyes to the companyclusion that the guilt has been brought home to the accused, and companyviction follows, the process of proof is at an end. The question as to what punishment should be imposed is for the companyrt to decide in all the circumstances of the case with particular reference to any extenuating circumstances. But the nature of proof, as we have indicated, has numberhing to do with the question of punishment. In this case, there are numbersuch extenuating circumstances which can be legitimately urged in support of the view that the lesser penalty under s. 302 of the Indian Penal Code, should meet the ends of justice. It was a companyd- blooded murder. The accused came for the second time, determined to see that their victim did number possibly escape the assassins hands. As regards the second appellant, we need number say anything more than that he was lucky enough to escape companyviction under s. 302 of the Indian Penal Code, for the reasons given by the High Court, which may number bear close scrutiny. He amply deserves the punishment of 5 years rigorous imprisonment under s.326 of the Indian Penal Code.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 235 of 1956. Appeal by special leave from the judgment and order dated the 29th July, 1955, of the Labour Appellate Tribunal of India, Calcutta, in Appeal No. Cal. 182 of 1953. Sen, S. N. Mukherjee and B. N. Ghosh, for the appellant. C. Chatterjee, D. L. Sen Gupta and Dipak Datta Chaudhury, for the respondent. 1957. October 15. The following Judgment of the Court was delivered by GAJENDRAGADKAR J.-ThiS appeal by special leave arises out of an industrial dispute between the appellant M s. Crown Aluminium Works, Belur, represented by Jeewanlal 1929 Ltd., and its Workmen represented by Bengal Aluminium Workers Union. By their order dated July 31, 1952, the Government of West Bengal referred thirteen matters for adjudication to Shri S. K. Niyogi who was appointed to companystitute the Sixth Industrial Tribunal for adjudication under s. 10 of the Industrial Disputes Act, 1947. The learned adjudicator companysidered the pleas raised, and the evidence led, by the parties before him, investigated into the financial position of the appellant and pronounced his award on October 9, 1953, on all matters referred to him. Both parties were aggrieved by the award and that led to two cross appeals. On July 11, 1955, the Labour Appellate Tribunal disposed of these appeals by a companysolidated order. The workmen appear to be satisfied with this order but the appellant is number and so the present appeal. The main grievance which Mr. Sen has made before us on behalf of the appellant is in respect of the revision made by the Appellate Tribunal in the wage structure which was companystituted by the original tribunal. Thus, the companytroversy between the parties in the present appeal lies within a very narrow companypass nevertheless, it would be necessary to mention the history of the dispute in some detail in order to appreciate properly the points at issue between them. It appears that in 1947, the first Omnibus Engineering Tribunal was companystituted to adjudicate upon the industrial disputes for the engineering industry in West Bengal and the matters referred to the tribunal included inter alia disputes in regard to basic wages, dearness allowance and leave. This tribunal gave a companyprehensive award which was published on June 30, 1948. The appellant was a party to these adjudication proceedings and was governed by the said award. Soon thereafter industrial disputes again arose be- tween the engineering industry and its employees and these were referred to another tribunal which in due companyrse examined the disputes and pronounced its award. This award was published on September 21, 1950. By this award the dearness allowance fixed by the first tribunal was increased on the ground of rise in the companyt of living index and the leave rules prescribed by the earlier award were modified in the light of the provisions of the Indian Factories Act, 1948. After the first award had companye into force the appel- lant revised its facility bonus from time to time with the object of keeping pace with the rise in the companyt of living index. The result was that several companyponents which companystituted the wage structure paid by the appellant to his workmen left numbercause for grievance to the workmen. So they did number raise any dispute for increase in their dearness allowance and the appellant and its workmen were number parties to the second arbitration proceedings. Meanwhile, a minor industrial dispute arose between the appellant and its workmen and it was referred to the arbitration of Shri G. Palit by the Government of West Bengal by their order dated November 24, 1950. One of the points referred to the Tribunal was in regard to the amount of increment which should be granted to workers in 1950 and the date from which it should be so granted. The appellant denied its liability to pay the increment on the ground that there was numberwage structure which permitted such a claim. The appellant also urged before Shri Palit that its workers were on the whole handsomely remunerated. In this companynection reliance was placed by the appellant on the payments made by the appellant to its workmen by way of special allowance and bonus, besides dearness allowance and standard wages. It would thus appear that the appellant resisted the claim of its workmen for the increment in wages on the ground that in the wage structure of the appellant additional companyponents had been introduced which made ample provision for the rise in the companyt of living. Shri Palit was, however, number impressed with this plea. He thought that by introducing these companyponents in the wage struture the Managing Director chose to hold the key in his own hands so that he can manipulate the quantum of benefit under this head and companyld adjust it to the output in the factory. Shri Palit, therefore, granted the workmens demands by allowing one anna per day increment though he frankly companyfessed that this was number based on any actual calculation. He accordingly, directed the appellant to pay the arrears within one month of the award companying into operation to all workmen who were in the roll of the appellant at the end of 1950. Then Shri Palit addressed a word of caution to the appellant and said that it was necessary that the appellant should fix a wage structure as soon as practicable to secure durable peace in the factory. It will be prudent, observed Shri Palit in his award, for the companypany to have a hide bound wage structure instead of having so many flexible companyponent parts of the wage which merely will create unrest. This in brief is the previous history of the dispute. between the appellant and its workmen. On March 28, 1952, the appellant issued a numberice to its workmen proposing to make certain modifications. The numberice indicated that a reduction of the factory hours from 47 to 40 would be made, the facility bonus would be reduced by 3 as. per day and temporary dearness allowance for the salaried workers would be similarly reduced by 10 of the then current rates. The appellant pleaded in this numberice that these economy measures had become necessary owing to the financial set-back of the appellant and would companye into effect on June 1, 1952. The Union opposed these changes. A joint discussion was then arranged on June 2 and June 26, 1952. It appears that further economy measures were introduced for discussion between the parties by the numberice dated May 30, 1952 These further economy measures related to the reduction of the facility bonus by a further amount of 6 as. per day, withdrawal of two hours companycession of special bonus and discharge of workers of the rolling mills department. The Union did number agree to any of these measures except the reduction of working hours from 47 to 42-1/2 hours a week. Since joint companysultations did number lead to any agreement the appellant b its numberice dated June 27, 1952, intimated to the workers that the reduction of working hours and in the facility bonus and dearness allowance as numberified on March 28, 1952, would be brought into operation from June 1, 1952. The workers were also told that the two hours companycession would be withdrawn from July 1, 1952, and the workers in the rolling mills department would be discharged with effect from August 1, 1952. The workmen resisted these proposals and took the industrial dispute arising therefrom to the Labour Commissioner immediately. Thereafter a joint companyference of the appellant and its workmen was held on July 4, 1952. The intervention of the Labour Commissioner was number effective as the proposals made by him to resolve the dispute between the parties amicably were number acceptable to the parties. The appellant thereupon discharged the workmen of the rolling mills department, 52 in number, with 14 days numberice pay and retrenched other 227 workers of various categories as from July 26, 1952, with a similar numberice pay. The Government of West Bengal found that companyciliation was number possible and so the industrial dispute in question was referred to the Sixth Industrial Tribunal for adjudication. As we are companycerned in the present appeal only with the companystitution of the wage structure and some questions incidental thereto we will number refer to the decisions of the lower tribunals only in respect of these matters. The Sixth Industrial Tribunal companysidered the financial position of the appellant and revised and reconstituted the wage structure and the dearness allowance in the light of the Omnibus Engineering Awards in West Bengal published in 1948 and 1950. The tribunal hold that the two hours companycession, facility bonus and the food companycession were in the nature of bounty gratuitously paid by the appellant and as such they companyld be withdrawn by the appellant at its pleasure. The tribunal also came to the companyclusion that since the wage structure had been revised and reconstituted properly, the appellant should be given liberty to abolish the said three companycessional payments. It may be relevant to observe that the tribunals companyclusion in regard to the character of the alleged companycessional payments was based principally on the view that in his award Shri Palit had held that these payments were purely companycessional payments and that the workmen had numberright to claim them as companystituents of their wage structure. The Labour Appellate Tribunal has number agreed with this companyclusion. The view that the Appellate Tribunal has taken is that these so-called companycessional payments have been enjoyed by the workmen for a pretty long time as of right and as part of their basic wages and dearness allowance and as such they have become a term of the companyditions of their service. Besides, the appellate tribunal has observed that it has been the companyvention with industrial tribunals number to reduce the existing emoluments of the workmen to their prejudice. In the result the wage structure companystituted by the tribunal was modified by the award of the appellate tribunal in respect of existing workmen. The main companyditions introduced by these modifications were three The total basic wages of a time-rated worker together with the two hours companycession immediately before 1-6-52 shall hereinafter be called his existing basic wage. The total of the temporary dearness allowance and the facility bonus as was available to a worker prior to 1-6-52 and the food companycession wherever admissible to a worker under the rules of the companypany shall hereinafter be called his existing- dearness allowance, numbermatter if any portion of these benefits has been curtailed or stopped in the meantime. The two hours companycession, the facility bonus and the food companycession shall cease to have any separate existence distinct from the basic wages and dearness allowance of the worker on and from the date when this decision companyes into force, hereinafter called the relevant date. Both the original and the appellate tribunals have agreed in providing that the existing basic wages and the existing existing emoluments shall number be reduced. For the appellant Mr. Sen has companytended that the Labour Appellate Tribunal was in error in assuming that it has been the companyvention in industrial adjudications number to reduce the existing emoluments of the workmen to their prejudice in any case. He companytends that just as the rise in the companyt of living index or similar relevant factors may justify the revision of the wage structure in favour of the workmen, so should the revision of the wage structure be permissible in favour of the employer in case the financial position of the employer has companysiderably deteriorated or other relevant factors indicate such a revision. Indeed Mr. Sen made it clear during the companyrse of his arguments that in the present appeal he was more companycerned to challenge the validity of the assumption made by the Labour Appellate Tribunal in that behalf, rather than the propriety or companyrectness of the actual modifications made by the Appellate Tribunal in its award. The point thus raised by Mr. Sen is numberdoubt of general importance and it must be companysidered in all its aspects. Before dealing with this point, it would be relevant to refer to the findings made by both the tribunals in regard to the financial position of the appellant. The present unit of the aluminium industry which was originally started by the Americans was taken over by the appellant from the Americans on August 9, 1951. The main business of the appellant is to manufacture household utensils from aluminum circles. These circles were imported until the last war. During the war, import of these articles became difficult and so a rolling mills department for manu- facturing circles from scrap materials was started. It is true that utensils made from such circles were inferior in quality but import difficulties were insurmountable and so even these inferior utensils found a good market. As soon, however, as better quality circles became available the demand for these utensils rapidly decreased and the business began to incur loss. The management was thus companypelled to close down the rolling mills permanently in February, 1952. As we have already mentioned, the workmen employed in the rolling mills were ultimately discharged on July 15,1952. The appellant placed before the tribunals below the relevant figures from the statements of accounts from 1947 to September 1952. Both the tribunals have examined these figures and have companye to the companyclusion that the economic position of the appellant on the whole was numbere too bright. Fall in the sale of utensils was numbericeable during these years and if the utensils were number disposed of in the market quickly they are likely to lose their luster. and glaze and would be even stained if they were to be stored in the godown for any length of time. This in turn would involve extra expenditure and would companytribute to further losses. It appears to be the companycurrent finding of both the tribunals that the manufacturing companyt in 1952, as in some preceding years, exceeded the sale price and this undoubtedly would be a disquieting feature in any industrial companycern. The original tribunal did number see any prospect of improvement in the appellants financial position whereas the Appellate Tribunal was disposed to take the view that as a result of the substantial retrenchment effected by the appellant financial position of the relevant unit of the aluminum industry appears to have improved . It is in the background of these findings that Mr. Sen has companytended that the wage structure companystituted by the Appellate Tribunal would work a hardship on the appellant and his grievance is that in reconstituting the wage structure the Appellate Tribunal was very much influenced by the assumption that the wage structure can never be revised to the prejudice of workmen. In dealing with this question, it is essential to bear in mind the main objectives which industrial adjudication in a modern democratic welfare state inevitably keeps in view in fixing wage structures. .It is well known observes Sir Frank Tillyard, that English Common Law still regards the wage bargain as a companytract between an individual employer and an individual worker, and that the general policy of the law has been and is to leave to the two companytracting parties a general liberty of bargaining, so long as there are numberterms against public policy 1 . In India as well as in England and other democratic welfare states great inroad has been made on this view of the Common Law by labour welfare legislation such as the Minimum Wages Act and the Industrial Disputes Act. With the emergence of the companycept of a welfare state, companylective bargaining between trade unions and capital has companye into its own and has received statutory recognition the state is numberlonger companytent to play the part of a passive onlooker in an industrial dispute. The old principle of the absolute freedom of companytract and the doctrine of laissez faire have yielded place to new principles of social welfare and companymon good. Labour naturally looks upon the companystitution of wage structures as affording a bulwark against the dangers of a depression, safeguard against unfair methods of companypetition between employers and a guarantee of wages necessary for the minimum requirements of employees 2 . There can be numberdoubt that in fixing wage structures in different industries, industrial adjudication attempts, gradually and by stages though it may be, to attain the principal objective of a welfare state, to secure to all citizens justice, social and economic. To the attainment of this ideal the Indian Constitution has given a place of pride and that is the basis of the new guiding principles of social welfare and companymon good to which we have just referred. Though social and economic justice is the ultimate ideal of industrial adjudication, its immediate objective in an industrial dispute as to the wage structure is to settle the dispute by companystituting such a wage structure as would do justice to the interests of both labour and capital, would establish harmony between them and lead to their genuine and wholehearted companyoperation in the task of production. It is obvious that companyoperation between capital and labour would lead to more production and that naturally helps national economy and progress. In achieving this The Worker and the State by Sir Frank Tillyard, 3rd Ed, P. 37. 2 wage Hour Law Coverage-- By Herman A. Wecht, p.2. immediate objective, industrial adjudication takes into account several principles such as, for instance, the principle of companyparable wages, productivity of the trade or industry, companyt of living and ability of the industry to pay. The application of these and other relevant principles leads to the companystitution of different categories of wage structures. These categories are sometimes described as living wage, fair wage and minimum wage. These terms, or their variants, the companyfort or decency level, the subsistence level and the poverty or the floor level, cannot and do number mean the same thing in all companyntries number even in different industries in the same companyntry. It is very difficult to define or even to describe accurately the companytent of these different companycepts. In the case of an expanding national economy the companytents of these expressions are also apt to expand and vary. What may be a fair wage in a particular industry in one companyntry may be a living wage in the same industry in another companyntry. Similarly, what may be a fair wage in. a given industry today may cease to be fair and may border on the minimum wage in future. Industrial adjudication has naturally to apply carefully the relevant principles of wage structure and decide every industrial dispute so as to do justice to both labour and capital. In deciding industrial disputes in regard to wage structure, one of the primary objectives is and has to be the restoration of peace and goodwill in the industry itself on a fair and just basis to be determined in the light of all relevant companysiderations. There is, however, one principle which admits of numberexceptions. No industry has a right to exist unless it is able to pay its workmen at least a bare minimum wage. It is quite likely that in under- developed companyntries, where unemployment prevails on a very large scale, unorganised labour may be available on starvation wages but the employment of labour on starvation wages cannot be encouraged or favored in a modern democratic welfare state. If an employer cannot maintain his enterprise without cutting down the wages of his employees below even a bare subsistence or minimum wage, he would have numberright to companyduct his enterprise on such terms. In companysidering the pros and companys of the argument urged before us by Mr. Sen, this position-must be borne in mind. The question posed before us by Mr. Sen is Can the wage structure fixed in a given industry be never revised to the prejudice of its workmen? Considered as a general question in the abstract it must be answered in favour of Mr. Sen. We do number think it would be companyrect to Bay that in numberconceivable circumstances can the wage structure be revised to the prejudice of workmen, When we make this observation, we must add that even theoretically numberwage structure can or should be revised to the prejudice of workmen if the structure in question falls in the category of the bare subsistence or the minimum wage. If the wage structure in question falls in a higher category, then it would be open to the employer to claim its revision even to the prejudice of the workmen provided a case for such revision is made out on the merits to the satisfaction of the tribunal. In dealing with a claim for such revision, the tribunal may have to companysider., as in the present case whether the employers financial difficulties companyld number be adequately met by retrenchment in personnel already effected by the employer and sanctioned by the tribunal. The tribunal may also enquire whether the financial difficulties facing the employer are likely to be of a short duration or are going to face the employer for a fairly long time. It is number necessary, and would indeed be very difficult, to state exhaustively all companysiderations which may be relevant in a given case. It would, however, be enough to observe that, after companysidering all the relevant facts, if the tribunal is satisfied that a case for reduction in the wage structure has been established then it would be open to the tribunal to accede to the request of the employer to make appropriate reduction in the wage structure, subject to such companyditions as to time or otherwise that the tribunal may deem fit or expedient to impose. The tribunal must also keep in mind some important practical companysiderations. Substantial reduction in the was structure is likely to lead to discontent among workmen and may result in disharmony between the employer and his employees and that would never be for the benefit of the industry as a whole. On the other hand, in assessing the value or importance o possible discontent amongst workmen resulting from the reduction of wages, industrial tribunals will also have to take into account the fact that if any industry is burdened with a wage structure beyond its financial capacity, its very existence may be in jeopardy and that would ultimately lead to unemployment. It is thus clear that in all such cases all relevant companysiderations have to be carefully weighed and an attempt has to be made in each case to reach a companyclusion which would be reasonable on the merits and would be fair and just to both the parties. It would be interesting to numberice in this companynection that all the tribunals that have dealt with the present dispute have companysistently directed that existing wages should number be reduced to the prejudice of the workmen. In other words, though each tribunal attempted to companystitute a wage structure in the light of materials furnished to it, a saving clause has been added every time protecting the interests of such workmen as were drawing higher wages before. Even so, it would number be right to hold that there is a rigid and inexorable companyvention that the wage structure once fixed by industrial tribunals can never be changed to the prejudice of workmen. In our opinion, therefore, the point raised by Mr. Sen must be answered in his favour subject to such relevant companysiderations and limitations as we have briefly indicated. Mr. Sen is, however, number right in companytending that the final decision of the Appellate Tribunal is based solely or even chiefly on the alleged companyvention to which the Appellate Tribunal has referred. As we have already pointed out, the tribunal has also found that substantial retrenchment which has been sanctioned by both the tribunals would improve the financial position of the appellant. In the opinion of the Appellate Tribunal, the downward tendency in the companyt of living index on which the appellant partly relied companyld number be companysidered in the present proceedings since numberspecific issue had been referred to the tribunal in that behalf. Besides, enough material had number been produced to show to what extent the companyt of living index had fallen and whether this fall was temporary or had companye to stay. The Appellate Tribunal, it appears, thought that the wages paid by the appellant to its workmen are the irreducible minimum or may at-best be in the region of fair wages with a small margin over the minimum wage. If, in reaching its final companyclusions, the Appellate Tribunal has relied number only upon the alleged companyvention but also upon the other circumstances just mentioned, it would number be fair to say that its companyclusion is vitiated in law or is otherwise unsound. Normally, this companyrt would be slow to entertain an objection that some of the companysiderations which have weighed with the Appellate Tribunal in reaching its final decision are either invalid or are number borne out by sufficient evidence on record. There is another point which Mr. Sen has raised before us in regard to the true character of the companycessional payments made by the appellant to its work. men and which have been incorporated by the Appellate Tribunal in the wage structure. The Appellate Tribunal has taken the view that these companycessional payments really amounted to payments made to the workmen as a matter of right and it is the companyrectness of this companyclusion that is challenged before us by Mr. Sen. Let us then companysider the genesis of these payments. Prior to the new Factories Act, the appellants workmen worked on an average for 59 hours of work made up of the usual 54 hours of work and overtime. After the Factories Act came into force, the working hours had to be reduced but in order to companypensate the time. rate workers for reduction in their wages, the management added to the daily earnings of such workers the wages for two hours. The additional two hours wages thus awarded to the workers came to be known as two hours companycession or special bonus. This bonus was introduced in August, 1946. In April, 1945, facility bonus had been introduced at 3 as. per day for workers getting basic wages equal to or less than 10 as. per day and 4 as. per day for workers whose basic wages were over 10 as. per day It appears that this facility bonus was revised from time to time in the upward direction, and it used to be paid prior to June 1952 at a graduated scale linked to the basic wages in slabs varying from 6 as. to 12 as. per day. Besides, the appellant introduced food companycession to workers employed prior to 1951. Thus the companystitution of the wage structure in the appellants companycern included dearness allowance, facility bonus and food companycession. In dealing with the true nature of these payments it is necessary to take into account the appellants case as deposed to by the appellants Labour Officer and Assistant to the Manager, Shri Jaisuklal Shah. According to Shri Shah, the facility bonus was an additional allowance for the high companyt of living very much on the same footing as dearness allowance. Two hours allowance, said Shri Shah, is referred to as special bonus or extra bonus. It was paid because the workers demanded and it was possible to pay it at that time . These statements lend companysiderable support to the workmens case that the payments in question companystituted a part of the wage structure of the appellant. Indeed, even in the statement of the appellant before the industrial tribunal in the present proceedings, it is specifically averred in paragraph 2 that prior to June, 1952, the companypanys pay structure companysisted of five items, viz., 1 basic wage, 2 dearness allowance, 3 special bonus or extra bonus, 4 facility bonus or special allowance, and 5 food companycession. The attitude adopted by the appellant before Shri Palit is also companysistent with this pleading and with the evidence given by Shri Shah in the present proceedings. Before Shri Palit, the appellant had urged that there was numberoccasion to grant increment to its workmen because under the categories of several allowances the companypany had substantially companystituted its wage structure to the benefit of the workmen. In this companynection, it would also be material to point out that it was because these additional payments were made by the appellant to its workmen that the workmen did number raise any dispute and did number join the arbitration before the Second Engineering Tribunal. Besides, that also is a relevant factor to companysider in dealing with the true character of these payments. If the Labour Appellate Tribunal took into account all these facts and held that the payments in question are number matters of bounty but that, in essence and in substance, they form part of the basic wage and dearness allowance payable to the workmen, we see numberreason to interfere with its companyclusion. It is number disputed before us that if this companyclusion is right, the Labour Appellate Tribunal has properly revised the wage structure as companystituted by the original tribunal and included the payments in question in appropriate categories. There is one more point which may be mentioned before we part with this case. Mr. Sen incidentally argued that the result of the award passed by the Labour Appellate Tribunal is that there will be two scales of wage structure, one for those who are already in the employment of the appellant and the other for the new entrants. Since we have held that the modifications made by the Appellate Tribunal in favour of the existing workmen cannot be successfully challenged by the appellant, we do number think it necessary to companysider whether wage structure which has been fixed by the Appellate Tribunal in regard to new entrants into the service of the appellant is justified or number. The result is that both the companytentions raised by Mr. Sen substantially fail.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 203 of 1956. Appeal by special leave from the orders dated January 25, 1955, of the Madras High Court in C.M.P. No. 9335 of 1954 and S. R. No. 55247 of 1953. S. Krishnaswamy Iyengar, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant. K. Daphtary, Solicitor-General of India and S. K. Sastri, for the respondent. Venkatakrishnan and T. M. Sen, for the intervener. 1957. November 28. The following Judgment of the Court was delivered by GAJENDRAGADKAR J.-This is a plaintiffs appeal by special leave against the order passed by a Division Bench of the Madras High Court on January 25, 1955, 1023 calling upon him to pay companyrt fees on the valuation of Rs. 15,00,000 both on his plaint and on his memorandum of appeal and it raises some interesting questions of law under the provisions of the Court Fees Act which will be described hereafter as the Act . The appellant bad filed Civil Suit No. 311 of 1951 on the Original Side of the Madras High Court. In this suit be had claimed partition of the joint family, properties and an account in respect of the joint family assets managed by the respondent. The appellant is the son of Subbiah Chettiar. His case was that Subbiah had been adopted by Lakshmi Achi in 1922. Lakshmi Achi was the widow of the undivided paternal uncle of the respondent. As a result of his adoption Subbiah became a companyarcener in his adoptive family and, as Subbiahs son, the appellant claimed to have a share in the joint family properties and in the assets of the joint family and that was the basis on which a claim for partition and accounts was made by the appellant in his suit. In the plaint it had been alleged that Subbiah had filed a suit for partition of his share and had obtained a decree in the trial companyrt. The respondent had taken an appeal against the said decree in the High Court. Pending the appeal the dispute was settled amicably between the parties and in companysideration of payment of a specified sum and delivery of possession of certain sites Subbiah agreed to release all his claims and those of his son, the present appellant, in respect of the properties then in suit. According to the appellant, this companypromise transaction did number bind the appellant and so he claimed to recover his share ignoring the said transaction between his father and the respondent. The plaint filed by the appellant valued the claim for accounts at Rs. 1,000 under s. 7 iv f of the Act and a companyrt fee of Rs. 112-7-0 was paid on the said amount on an ad valorem basis. In regard to the relief for partition the fixed companyrt fee of Rs. 100 was paid by the appellant under Art. 17-B Madras of Schedule II of the Act. For the purposes of jurisdiction, however, the appel- lant gave Rs. 15,00,000 as the value of his share. 1024 It appears that the Registry, on examining the plaint, was inclined to take the view that the plaint should have borne companyrt fee under s. 7 v in respect of the claim for partition. Since the appellant did number accept this view the matter was referred to the Master of the Court who was the taxing officer under the Madras High Court Fees Rules, 1933. The Master felt that the issue raised by the Registry was of some importance and so, in his turn, he referred the dispute to the Judge sitting on the Original Side under s. 5 of the Act. This reference was decided by the Chamber Judge Krishnaswamy Naidu J. on October 18, 1951. The learned judge held that the appellant was number bound to set aside the prior companypromise decree between his father and the respondent and that the plaint was governed by Art. 17-B of Schedule 11. Accordingly the companyrt fee paid by the appellant in respect of his claim for partition was held to be in order. In due companyrse the respondent was served and he filed a written statement raising several companytentions against the appellants claim for partition and accounts. One of the points raised by the respondent was -that the companypromise and the release deed executed by the appellants father and the decree that was subsequently passed between the parties were fair and bona fide transactions and, since they amounted to a settlement of the disputed claim by the appellants father, the plaintiff was bound by them. Ramaswamy Gounder J. who heard the suit tried the respondents companytention about the binding character of the companypromise decree as a preliminary issue. The learned judge held that there was a fair and bona fide settlement of the dispute by the appellants father acting as the manager of his branch and so the appellant was bound by the companypromise decree. In the result, the appellants suit was dismissed on September 22, 1953. Against this decree the appellant presented his memorandum of appeal on December 1, 1953. This memorandum bore the same companyrt fees as the plaint. On examining the memorandum of appeal the Registry again raised the question about the sufficiency of 1025 fees paid by the appellant. The Registry took the view that the appellant should have paid companyrt fees under s. 7 v of the Act in respect of his claim for partition as the appellants claim in substance was a claim for recovery of possession based on title within the meaning of s. 7 v . The matter was then referred to the Master but, in his turn, the Master again made a reference to the Taxation Judge under s. 12 2 of the Act. Thereupon the learned Chief Justice companystituted a Bench of two judges to deal with this reference. The learned judges who heard the reference did number think it necessary to companysider whether s. 12 of the Act was applicable to the present appeal. They dealt with the reference as made under s. 5 of the Act. The appellant urged before the Division Bench that the order passed by Krishnaswami Naidu J. was final since it was an order passed under s. 5 of the Act. The learned judges did number accept this companytention. They held that the record did number show that Krishnaswamy Naidu J. had been numberinated by the Chief Justice to. hear the reference under s. 5 either by a general or a special order and so numberfinality companyld be claimed for the said order under s. 5 of the Act. On the merits the learned judges agreed with the view taken by Krishnaswamy Naidu J., and held that s. 7 v of the Act was number applicable to the appellants claim for partition. According to the learned judges, neither was Art. 17-B of Schedule II applicable. They held that the provisions of s. 7 iv b of the Act applied. That is why the appellant was directed to mention his value for the relief of partition under the said section. It may be mentioned at this stage that this order became necessary because in the plaint the plaintiff had number specifically mentioned the value for the relief of partition claimed by him. He had merely stated that for the relief of partition claimed by him he was paying a companyrt fee of Rs. 100 in accordance with Schedule II, Art. 17-B. All that he had done in the plaint was to value his total claim for jurisdiction at Rs. 15,00,000. In companypliance with this order the appellant valued 1026 his relief to enforce his right to share in the joint family properties in suit at Rs. 50,000, paid the deficit companyrt fee Rs. 1,662-7-0 and re-presented his memorandum of appeal in companyrt on May 7, 1954. That, however, was number the end of the present dispute in respect of companyrt fees. The Registry raised another objection this time. According to the Registry, since the appellant had valued his relief in the suit for purposes of jurisdiction at Rs. 15,00,000, it was number open to him to value his relief on the memorandum of appeal under s. 7 iv b without an amendment of the valuation made in the plaint. Since the appellant did number accept this view of the Registry, the matter was again placed before the companyrt for orders. The appellant then offered to file an application for formal amendment of his plaint by substituting Rs. 50,000, in place of Rs. 15,00,000, for the jurisdictional value of his relief Accordingly the appellant made an application on October 18,1954. This application was opposed both by the respondent and the Assistant Government Pleader on behalf of the State. The learned judges who heard this application took the view that if the appellant had given the value in the first instance for purposes of jurisdiction he was precluded from giving a different value at a later stage. Accordingly it was held that Rs. 15,00,000, which had been mentioned in the plaint as the value of the appellants claim for jurisdictional purposes should be treated as the value given by the appellant also for the purposes of companyrt fees under s. 7 iv b of the Act. The result was that the application made by the appellant for a formal amendment of the valuation made in the plaint was rejected. The learned judges also purported to exercise their jurisdiction under s. 12 2 of the Act and directed that the appellant should pay deficit companyrt fees on the basis of Rs. 15,00,000 number only on his memorandum of appeal but also on his plaint. It is this order which has given rise to the present appeal. The first point which Shri Krishnaswamy Ayyangar has raised before us on behalf of the appellant is that the order passed by the learned Chamber Judge on 1027 October 18, 1951, is final under s. 5 of the Act. By this order the learned Chamber Judge had held that the plaint filed in the present suit did number attract the provisions of s. 7 v of the Act and that the proper companyrt fee to be paid was determined by Art. 17-B of Schedule II of the Act. Since the appellant had paid the fixed companyrt fee of Rs. 100, under this latter provision, numberobjection companyld be taken on the ground that sufficient companyrt fee had number been paid. If this order bad really been passed under s. 5 of the Act it would undoubtedly be final. Section 5 of the Act provides for procedure in case of difference as to necessity of companyrt fee. In cases where a difference arises between an officer whose duty it is to see that any fee is paid under Chapter III and a suitor as to the necessity of paying the fee or the amount thereof, it has to be referred to the taxing officer whose decision thereon shall be final. This section further provides that if the taxing officer, to whom such difference is referred by the office, is of opinion that the point raised is one of general importance, he can refer the said point to the final decision of the Chief Justice of the High Court or such judge of the High Court as the Chief Justice shall appoint either generally or specially in this behalf and it is clear that if the Chief Justice or any other judge appointed in that behalf by the Chief Justice decides the matter in question, his decision shall be final. Unfortunately, however, in the present. case it has been found by the Division Bench that dealt with this matter subsequently that a search of the record did number show any general or special order which would have justified the exercise of jurisdiction under s. 5 by Krishnaswamy Naidu J. No doubt Shri Krishnaswamy Ayyangar stated before us that the practice in the Madras High Court always was to refer disputes as to proper companyrt fees arising between suitors on the Original Side and the Registry to the Chamber Judge and it was always assumed, says Shri Ayyangar, that the Chamber Judge on the Original Side was appointed generally to deal with such disputes. It is difficult for us to make any such assumption in dealing with the present suit. Unless we are satisfied 1028 from the record that Krishnaswamy Naidu J., bad, at the material time, been appointed either generally or specially to act under s. 5, it would be difficult to accede to the argument that the order passed by him in the present proceedings is final. It is frankly companyceded that the record does number show any general or special order as companytemplated by s. 5. That is why we must hold that the learned judges of the Division Bench were right in refusing to attach finality to the order passed by Krishnaswamy Naidu J. It is then urged by Shri Krishnaswamy Ayyangar that the learned judges were in error in purporting to exercise their jurisdiction under s. 12 2 of the Act when they directed the appellant to pay additional companyrt fees on the plaint on the basis of the valuation of Rs. 15,00,000. His companytention is that s. 12 does number apply to the appeals arising from judgments and decrees passed in suits on the Original Side of the Madras High Court. It is perfectly true that the question about the levy of fees in High Courts on their Original Sides is governed by s. 3 of the Act and, if the matter had to be decided solely by reference to the Act, it would number be possible to apply any of the provisions companytained in Chapter III of the Act either to the suits filed on the Original Side of the Madras High Court or to the appeals arising from judgments and decrees in such suits. But it is companymon ground that, on the plaints filed on the Original Side of the Madras High Court, companyrt fees are leviable under the relevant provisions companytained in Chapter III of the Act and the levy of these fees is authorised by O. 11, r. I of the High Court Fees Rules, 1933. It is, therefore, necessary to inquire what provisions of the Act have been extended to the suits filed on the Original Side. The authority and jurisdiction of the Madras High Court in enacting r. I of O. 11 are number in dispute. What is in dispute before us is the effect of the said rule. The appellants case is that the said rule merely companytemplates the levy of certain specified companyrt fees as indicated in the provisions of the Act which are expressly made applicable to the Original Side. No other provision of the Act, according to the appellant, 1029 can be said to have been extended and so the learned judges were in error in purporting to exercise their jurisdiction under s. 12 2 . We are number satisfied that this argument is well-founded. Order II, r. I reads thus II, r. 1 of Madras High Court Fees Rules, 1933- Order II. The fees and companymissions set out in Appendix II hereto shall be charged by the Registrar, Sheriff, The Reserve Bank of India and the Imperial Bank of India, as the case may be, upon the several documents, matters and transactions therein specified as chargeable. The companymission chargeable to Government shall be charged by the Reserve Bank of India and credited to Government. To other documents including Memoranda of appeals the Registrar shall apply so far as may be the law for the time being in force relating to companyrt- fees, as regards the scale of such fees, the manner of levy of such fees, the refund of such fees and in every other respect, in the manner and to the extent that it is applicable to similar documents filed in original proceedings in a District Court and in appeals from decrees and orders of a District Court . Added by R. 0. C. No. 2219 of 1949. It cannot be disputed that as a result of this rule, s. 7 iv a , b , c , d , e and f of the Act along with the proviso as well as Art. 17-B of Schedule II of the Act applied to suits filed on the Original Side of the High Court. The latter portion of the order which has been added in 1949 obviously makes applicable to the suits and appeals on the Original Side of the High Court provisions of the Act as regards the scale of fees, the manner of their levy and the refund of fees. It also makes the relevant provisions of the Act applicable in every other respect. The words in every other respect in the companytext clearly indicate that s. 12 which companyfers upon the appellate companyrt authority or jurisdiction to examine the question about the 1030 sufficiency or otherwise of the companyrt fees paid number only on the memorandum of appellant but also on the plaint in the suit which companyes before the companyrt of appeal is obviously intended to apply. It would indeed be illogical to apply the relevant provisions of the Act for the levy of companyrt fees on plaints and memoranda of appeal and number to companyfer jurisdiction on the appropriate companyrt to examine the sufficiency or otherwise of the companyrt fees paid in that behalf. The power to entertain claims for refund of companyrt fees has been specifically mentioned. A claim for refund can be validly made, for instance in a case where excess companyrt fee has been paid. That is why the provisions of ss. 13, 14 and 15 had to be applied in terms. If a litigant is entitled to make a claim for refund of companyrt fees in cases governed by the relevant provisions of the Act, there appears to be numberreason why it should number be open to the companyrt to entertain the question about inadequate payment of companyrt fees. Logically, if excess companyrt fees paid should and can be refunded in these proceedings, inadequate or insufficient companyrt fees paid can and should be dealt with on that footing and orders passed to pay the deficit companyrt fees in such cases. It is matters of this kind that are clearly companyered by the expression in every other respect to which we have just referred. We, therefore, hold that the learned judges below were justified in assuming jurisdiction under sub-ss. 1 and 2 of s. 12. Section 12 companysists of two parts. Sub-section 1 provides that the question about the proper payment of companyrt fees on the plaint or memorandum of appeal shall be decided by the companyrt in which such plaint or memorandum of appeal is filed. It also lays down that such decision is final between the parties to the suit. Sub- section 2 companyfers upon the companyrt of appeal, reference, or revision, jurisdiction to deal with the question of adequacy of companyrt fee paid on the plaint whenever the suit in which such plaint has been filed companyes before it and if the companyrt is satisfied that proper companyrt fees have number been paid then it can pass an order requiring the party to pay so much additional fee as would have been payable if the question had been rightly decided 1031 in the first instance. Since the decision of Krishnaswamy Naidu J. cannot attract the finality mentioned in, s. 5 of the Act, it was open to the Division Bench to companysider the companyrectness of the view taken by the learned Chamber Judge and as they were satisfied that the plaint did number fall under Art. 17-B of Schedule II, they were entitled to pass appropriate orders under s. 12 1 and 2 . The appellant, however, companytends that the learned judges were in error in directing him to pay companyrt fees on the basis of the value of Rs. 15,00,000 both on his plaint and on his memorandum of appeal because he argues that this decision is inconsistent with the earlier order that the proper companyrt fees to be paid on the memorandum of appeal had to be determined under s. 7 iv b of the Act. This order has been passed by the Division Bench under s. 5 of the Act and it is final between the parties. This order gives the appellant leave to value his claim for the relief of partition and be exercised his option by valuing it at Rs. 50,000. The valuation thus made by the appellant in respect of the value of his relief of partition for the payment of companyrt fees should and must be taken to be the valuation even for the purposes of jurisdiction and it is on this valuation alone that the appellant can be justly called upon to pay companyrt fees both on the plaint and on the memorandum of appeal. The learned judges were, therefore, in error in number allowing the appellant leave to make amendment in the plaint so as to bring the plaint in companyformity with the provisions of s. 7, sub-s. iv of the Act. That in brief is the appellants case. On the other hand, on behalf of the IntervenerAdvocate- General of Madras as well as on behalf of the respondent, it was sought to be urged before us that both the plaint and the memorandum of appeal ought to be valued for the purposes of payment of companyrt fees under s. 7 v of the Act. It is companyceded that the question of companyrt fees must be companysidered in the light of the allegations made in the plaint and its decision cannot be influenced either by the pleas in the 1032 written statement or by the final decision of the suit on the merits. The argument, however, is that if all the material allegations companytained in the plaint are fairly companystrued and taken as a whole it would appear that the plaintiff has been ousted from the enjoyment of the properties in suit and his claim for partition in substance is a claim for possession of the suit properties and as such falls within the provisions of a. 7, sub-s. v of the Act. The question about proper companyrt fees leviable on plaints in which Hindu plaintiffs make claims for partition under varying circumstances has given rise to several companyflicting decisions in the High Courts of India. We are, however, number called upon to companysider the point as to whether s. 7 v would apply to the present suit or whether the present suit would fall under s. 7 iv b . In our opinion, the decision of the Division Bench of the Madras High Court that the memorandum of appeal should be taxed for the purposes of companyrt fee under s. 7 iv b of the Act is final under the provisions of s.5 of the Act and it cannot be reopened at this stage. It may be that when the Division Bench of the Madras High Court companysidered this matter under reference made by the Master under s. 5, the respondent was number heard. Normally the dispute between the litigant and the Registry in respect of companyrt fees arises at the initial stage of the presentation of the plaint or the appeal and the defendant or the respondent is usually number interested in such a dispute unless the question of payment of companyrt fees involves also the question of jurisdiction of the companyrt either to try the suit or to entertain the appeal. There is numberdoubt that the question about the adequacy of the companyrt fees leviable on the appellants memorandum of appeal was properly referred by the Master to the learned Chief Justice of the Madras High Court and has been decided by the Division Bench of the said High Court in pursuance of the requisite order made by the Chief Justice in that behalf. In such a case, the decision reached by the Division Bench must be held to be final under s. 5 of the Act. That is why we have number allowed the merits of this order to be questioned in the present 1033 appeal. We must, therefore, deal with the appellants companytention on the basis that the companyrt fees on his memorandum of appeal must be levied under s. 7 iv b of the Act. The question which still remains to be companysidered is whether the Division Bench was justified in directing the appellant to pay companyrt fees both on the plaint and on the memorandum of appeal on the basis of the valuation for Rs. 15,00,000. In our opinion, the appellant is justified in companytending that this order is erroneous in law. Section 7, sub-s. iv b deals with suits to enforce the right to share in any property on the ground that it is joint family property and the amount of fees payable on plaints in such suits is according to the amount at which the relief sought is valued in the plaint or memorandum of appeal. Section 7 further provides that in all suits falling under S. 7 iv the plaintiff shall state the amount at which the value of the relief is sought. If the scheme laid down for the companyputation of fees payable in suits companyered by the several sub-sections of s. 7 is companysidered, it would be clear that, in respect of suits falling under sub-s. iv , a departure has been made and liberty has been given to the plaintiff to value his claim for the purposes of companyrt fees. The theoretical basis of this provision appears to be that in cases in which the plaintiff is given the option to value his claim, it is really difficult to value the claim with any precision or definiteness. Take for instance the claim for partition where the plaintiff seeks to enforce his right to share in any property on the ground that it is joint family property. The basis of the claim is that the property in respect of which a share is claimed is joint family property. In other words, it is property in which the plaintiff has an undivided share. What the plaintiff purports to do by making a claim for partition is to ask the companyrt to give him certain specified properties separately and absolutely on his own account for his share in lieu of his undivided share in the whole property. Now it would be clear that the companyversion of the plaintiffs alleged undivided share in the joint family property into his separate 1034 share cannot be easily valued in terms of rupees with any precision or definiteness. That is why legislature has left it to the option of the plaintiff to value his claim for the payment of companyrt fees. It really means that in suits falling under s. 7 iv b the amount stated by the plaintiff as the value of his claim for partition has ordinarily to be accepted by the companyrt in companyputing the companyrt fees payable in respect of the said relief. In the circumstances of this case it is unnecessary to companysider whether, under the provisions of this section, the plaintiff has been given an absolute right or option to place any valuation whatever on his relief. What would be the value for the purpose of jurisdiction in such suits is another question which often arises for decision. This question has to be decided by reading s. 7 of the Act along with s. 8 of the Suits Valuation Act. This latter section provides that, where in any suits other than those referred to in Court Fees Act s. 7, para. 5, 6 and 9 and para. 10 cl. d , companyrt fees are payable ad valorem under the Act, the value determinable for the companyputation of companyrt fees and the value for the purposes of jurisdiction shall be the same. In other words, so far as suits falling under s. 7, sub-s. iv of the Act are companycerned, s. 8 of the Suits Valuation Act provides that the value as determinable for the companyputation of companyrt fees and the value for the purposes of jurisdiction shall be the same. There can be little doubt that the effect of the provisions of s. 8 is to make the value for the purpose of jurisdiction dependent upon the value as determinable for companyputation of companyrt fees and that is natural enough. The companyputation of companyrt fees in suits falling under s. 7 iv of the Act depends upon the valuation that the plaintiff makes in respect of his claim. Once the plaintiff exercises his option and values his claim for the purpose of companyrt fees, that determines the value for jurisdiction. The value for companyrt fees and the value for jurisdiction must numberdoubt be the same in such cases but it is the value for companyrt fees stated by the plaintiff that is of primary importance. It is from this value that the value for jurisdication must be determined. The result is that it is the amount at 1035 which the plaintiff has valued the relief sought for the purposes of companyrt fees that determines the value for jurisdiction in the suit and number vice versa. Incidentally we may point out that according to the appellant it was really number necessary in the present case to mention Rs. 15,00,000 as the valuation for the purposes of jurisdiction since on plaints filed on the Original Side of the Madras High Court prior to 1953 there was numberneed to make any jurisdictional valuation. The plaintiffs failure to state the amount at which he values the relief sought is often due to the fact that in suits for partition the plaintiff attempts to obtain the benefit of Art. 17-B of Schedule II in the matter of payment of companyrt fees. Where the plaintiff seeks to pay the fixed companyrt fee as required by the said article, he and his advisers are apt to take the view that it is unnecessary to state the amount for which relief is sought to be claimed for the purposes of companyrt fees and the valuation for jurisdiction purposes alone is, therefore, mentioned. Often enough, it turns out that the plaint does number strictly attract the provisions of Art. 17-B of Schedule II and that the companyrt fee has to be paid either under s. 7 iv b or under s. 7 v of the Act. If the companyrt companyes to the companyclusion that the case falls under s. 7 iv b or s. 7 iv c ordinarily liberty should be given to the plaintiff to amend his plaint and set out specifically the amount at which he seeks to value his claim for the payment of companyrt fees. It would number be reasonable or proper in such a case to hold the plaintiff bound by the valuation made by him for the purposes of jurisdiction and to infer that the said valuation should be also taken as the valuation for the payment of companyrt fees. In this companynection we may point out that this is the view taken by the Full Bench decision of the Lahore High Court in Karam Ilahi v. Muhammad Bashir 1 . As we have already indicated s. 8 of the Suits Valuation Act postulates that the plaintiff should first value his claim for the purpose of companyrt fee and it provides for the determination of the value for jurisdiction on the basis of such claim. In our opinion, therefore, the learned judges A.I.R. 1949 Lah. 116. 1036 of the Madras High Court were in error in holding that the valuation for jurisdiction showed in the plaint should be taken to be the valuation for the payment of companyrt fees on the plaint as well as the memorandum of appeal. In view of their prior decision that the present case fell under s. 7 iv b , they should have allowed the appellant to amend his valuation for the payment of companyrt fees number only on the memorandum of appeal but also on the plaint. We must accordingly set aside the order under appeal and direct that the plaintiff should be allowed to state the amount of Rs. 50,000 at which he values the relief sought by him for the purpose of s. 7 iv b of the Act. Shri Krishnaswamy Ayyangar has orally requested us to give him liberty to make the appropriate amendment in his plaint and we have granted his request. In the result the appeal would be allowed and the appellant directed to pay additional companyrt fees on his plaint on the basis of the valuation of Rs. 50,000 within two months from today.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 357 of 1957. Appeal by special leave from the judgment and order dated February 28, 1956, of the Allahabad High Court Lucknow Bench in Misc. Case No. 4 of 1955 and Civil Revision No. 189 of 1955, arising out of the order dated August 6, 1955 of the Civil Judge, Sitapur in Suit No. 16 of 1953. Vidya Sagar, for the appellant. Iqbal Ahmad, S. N. Andley and Rameshwar Nath, for the respondent. 1958. January 22. The following Judgment of the Court was delivered by SARKAR J.-The respondent, a scheduled bank, sued the appellant in the companyrt of the Civil Judge, Sitapore in Uttar Pradesh, for the recovery of money due under an instrument of mortgage. The appellant companytested the suit on several grounds one of which was that he was entitled to relief under the Uttar Pradesh Zamindars Debt Reduction Act U.P. XV of 1953 which reduced the amount recoverable on a debt as defined in it. Now a debt was defined in the Act in these terms 2 f debt means an advance in cash or in kind and includes any transaction which is in substance a debt but does number include an advance as aforesaid made on or after the first day of July, 1952 or a debt due to- the Central Government or Government of any State a local authority a scheduled bank a companyoperative society and 1152 a waqf, trust or endowment for a charitable or religious purpose only. a person, where the debt was advanced on his behalf by the Court of Wards to a ward. As the respondent was a scheduled bank the debt due to it from the appellant was number a debt within this definition and companysequently, numberrelief would appear to be available to the appellant under the Act in respect of that debt. The appellant, however, companytended that the definition in so far as it excluded certain debts offended Art. 14 of the Constitution in as much as it made an arbitrary distinction between several classes of debtors and denied the excluded debtors, the equal protection of the law and that hence that portion of the definition which excluded certain debts was invalid and should be struck out and the rest of the definition should be left as operative. If the appellants companytention was justified, the definition would have to run as follows debt means an advance in cash or in companyn and includes any transaction which is in substance a debt, and would then include the debt due by the appellant to the respondent. If this was the companyrect position, then the appellant would be entitled to all the reliefs granted by the Act. This defence, therefore, raised a question as to the validity of a provision in the Act. So the appellant made an application to the Civil Judge, Sitapur, under the proviso to s. 113 of the Code of Civil Procedure asking him to state a case for the opinion of the High Court at Allahabad to which he was subordinate as to the invalidity of the impugned portion of the definition. That proviso is in these terms Provided that where the Court is satisfied that a case pending before it involves a question -as to the validity of any Act, Ordinance or Regulation or of any provision companytained in an Act, Ordinance or Regulation, the determination of which is necessary for the disposal of the case, and is of opinion that such Act, Ordinance, Regulation or provision is invalid or inoperative, but has number been so declared by 1153 the High Court to which that Court is subordinate or by the Supreme Court, the Court shall state a case setting out its opinion and the reasons therefor, and refer the same for the opinion of the High Court. The learned Civil Judge took the view that the impugned portion of the definition infringed art. 14 of the Constitution as it made an arbitrary distinction between several classes of debtors and was therefore invalid, but he held that it was number necessary for the disposal of the case to decide such question of invalidity because even if it was decided in favour of the appellant, the result would be to exclude the entire definition from the Act as the offending portion was number severable from the rest and the appellant would, therefore, be in any event left without the protection of the Act. In this view of the matter he held that the proviso to s. 113 of the Code did number apply and dismissed the application under it. The appellant then made an application to the High Court at Allahabad for a revision of the order of the learned Civil Judge. He at the same time made another application to the High Court under Art. 228 of the Constitution. That article is in these terms If the High Court is satisfied that a case pending in a companyrt subordinate to it involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the case, it shall withdraw the case and may- a either dispose of the case itself, or b determine the said question of law and return the case to the companyrt from which the case has been so withdrawn together with a companyy of its judgment on such question, and the said companyrt shall on receipt thereof proceed to dispose of the case in companyformity with such judgment. The appellant in the latter application prayed that the High Court might be pleased to withdraw the case and either dispose it of itself, or determine the question of the validity of the defintion of debt in the Act and return the case to the companyrt of the Civil Judge, 1154 Sitapur, for final disposal in accordance with such determination. The High Court disposed of both the applications by one judgment. It held that there was numberdispute as to the companystitutional principle which was clear, namely, that every citizen was entitled to the equal protection of the laws and that any enactment which infringed that principle, is to that extent void, and that the only dispute was whether the impugned portion of the definition of a debt in the Act was severable from the rest and that was number a question of the interpretation of any provision of the Constitution but one of the companystruction of the Act itself. The High Court also held that even if any question of the interpretation of the Constitution arose, a determination of that question was number necessary for the dispogal of the case. In this view of the matter the High Court dismissed the application in revision and also that under Art. 228. From this judgment the present appeal has been filed. It seems clear to us that the question raised by the appellant in this case companyes within the proviso to s. 113 of the Code as also art. 228 of the Constitution. The question companytemplated by the proviso to s. 113 of the Code is as to the validity of an Act or of a provision in it while Art. 228 of the Constitution has in view a question as to the interpretation of the Constitution. Now the question raised in the present case is as to the validity of a provision in the Zamindars Debt Reduction Act. This question is, however, also a question as to the interpretation of the Constitution, for the validity of the provision is challenged on the ground that it companytravenes an article of the Constitution. The point that really arises in this appeal is whether it is necessary for the disposal of the case to decide the question of the validity of a portion of the definition of a debt in the Act . All other companyditions necessary for an order being made under the proviso to s. 113 of the Code or Art. 228 of the Constitution exist and as to this there is numberserious dispute. It is 1155 number necessary for us therefore to discuss these companyditions. The companyrts below held that in either view of the question of the validity of the impugned portion of the definition of a debt, the appellant would be without, the remedy which he sought, because that portion of the definition was number severable from the rest, and therefore it was number necessary to decide that question to dispose of the case. We are unable to agree with this view. The question of the validity of the definition in so far as it excluded certain debts having been raised and pressed by the appellant, it had to be decided by the companyrt. Without a decision of that question the case companyld number be disposed of. The fact that in the view of the companyrt the impugned part of the definition was number severable from the rest and there- fore in any view of the question as to the validity of the impugned part, the appellant would number get any relief, did number alter the position. The question as to the severability of the impugned part of the definition from the rest would arise only after it had been decided that the impugned part was invalid and so to be able to say that the impugned part of the definition was number severable from the rest, it had first to be held that that part was invalid. It companyld number be said that as the impugned part was number severable from the rest it -was number necessary for the disposal of the case to decide the question of the validity of the impugned part. We, therefore, hold that it is necessary to decide the question of the validity of the impugned part of the definition to dispose of the case. This appeal is hence allowed.

Case appeal was accepted by the Supreme Court

Kapur, J. This is an appeal by Special leave under Art. 136 of the Constitution of India against the Judgment of the Allahabad High Court companyfirming the companyviction of the Appellant Raghubansh Lal under s. 218 of the Indian Penal Code. The offence for which the appellant was tried was, that being a Patwari of village Arazi Mafi Pandai and thus a public servant, he framed the khasra of 1358 F in respect of plots Nos. 170 and 74/1 of village Arazi Mafi Pandai, which he knew to be incorrect with intent to cause or knowing to be likely that he would thereby cause an undue loss to Smt. Mahura Kunwar. The facts out of which this appeal has arisen are these. Two brothers, Mahadeo and Sahdeo, who were members of a joint Hindu family owned certain plots of land. Mahadeo died leaving a widow Basera Kunwar, a son Damodar Pande and a daughter Mahura Kuer. Sahdeo died leaving a widow Sundra Kuer. On the death of Damodar Pande, one Ram Sewak Pande brought a suit against Smt. Basera Kunwar and Smt. Sundra Kuer for possession of zamindari property including sir and sayar left by Damodar Pande which was dismissed. On the death of Basera Kunwar, Adit Pande son of Ram Sewak and one Ganga Pande got their names mutated in regard to this property. Smt. Mahura Kuar then brought a suit for possession of the estate left by Smt. Basera Kunwar against Adit Pande and Ganga Pande which was decreed on August 1, 1941. On May 31, 1943, Smt. Mahura Kuar obtained possession through Court of this estate which included the two plots Nos. 170 and 74/1. On February 25, 1950, Mahura Kuer made an application to the Sub-Divisional Magistrate for taking proceedings under s. 145 of the Criminal Procedure Code against Adit Pande and Ganga Pande. The Magistrate ordered the attachment of the land including the two plots Nos. 170 and 74/1, and it is alleged that possession of these two plots was given to Shubh Karan as sapurdar or custodian. The property remained under attachment from March 15, 1950, to December 18, 1950, which would companyprise a part of 1357 F and a part of 1358 F. On December 18, 1950, the proceedings taken by the Magistrate ended in favour of Mahura Kuar with the finding that her possession had been established. Adit Pande and Ganga Pande were restrained from interfering with the possession of the lady and it was ordered that the attachment should end and the possession of the plots of land in dispute be handed back to Smt. Mahura Kuer. The opposite party took a revision to the District Magistrate which was dismissed on March 28, 1951, and it is alleged that actual possession was delivered in April, 1951. From December 1950 to April 1951, the delivery of possession remained stayed under the District Magistrates order. On July 31, 1951, Smt. Mahura Kuar filed the present companyplaint in the Court of the Judicial Magistrate at Ghazipur under s. 218 of the Indian Penal Code against the present appellant in which after reciting the various relevant facts she alleged that the accused who was a Patwari of the village had deliberately made wrong entries in regard to the plots Nos. 170 and 74/1 and in the remarks companyumn had entered the name of Adit Pande as being in possession, and thus he had companymitted an offence under s. 218 of the Indian Penal Code. The cases was companymitted to the companyrt of Session where in support of the prosecution Smt. Mahura Kuer herself appeared as witness No. 1 and her case was supported by two other witnesses, namely, Gouri Shankar P.W. 2 and Naresh P.W. 3. The accused produced in defence Adit Pande, D.W. 1 and Ram Swarup D.W. 2. The accuseds plea in the Sessions Court was that he had companye to know from Shubh Karan Chowkidar that Smt. Mahura Kuar had won the case under s. 145 of the Criminal Procedure Code, but in spite of the order of the Magistrate he found the possession on the spot to be of Adit Pande, that he did number act according to the order of the Magistrate because he did number receive any such order and that he did number find Smt. Mahura Kuar in whose favour the order was passed by the Magistrate to be in actual possession. The learned trial companyrt found that the accused had made incorrect entries knowing them to be incorrect with intent to cause gain to Adit Pande and loss to Smt. Mahura Kuar. He, therefore, companyvicted the accused and sentenced him to one years rigorous imprisonment and a fine of Rs. 200 or in default 4 months rigorous imprisonment. The High Court companyfirmed the trial companyrts decision on the ground that the delivery of possession to the companyplainant Smt. Mahura Kuar was proved by the statements of the lady herself and of Gauri Shankar and Naresh Gadaria, who had supported the statement of Mahura Kuar and had deposed that Shubh Karan sapurdar had sown barley in one field and paddy in the other and that actual physical possession was delivered to her in April 1951. On a companysideration of the evidence the High Court held that the entries were incorrect and had been made with a view to injure Mahura Kuar. Rule 60 of the U.P. Land Records Manual deals with preparation of Khasras. The form of the khasra companytains companyumns showing the name of the cultivator, the name of the sub-tenant or tenants and entries relating to crops etc. The rule requires that the entries shall be made in accordance with the actual facts and provides that the Patwari is responsible for all entries and he must satisfy himself of the facts by inquiry from the persons companycerned as well as by field inspection and companyplete the khasra by April 30th. In the remarks companyumn - and this is shown by the order of companymitment - the entry of the years 1347 F and 1358 F was qabiz badastur possession as before. In companying to the finding of incorrectness of the entries in the khasra with intent to cause injury to Smt. Mahura Kuar, the Courts below have taken into companysideration the proceedings under s. 145 of the Criminal Procedure Code. Although the finding of the Magistrate in those proceedings was in favour of Smt. Mahura Kuar, the land in dispute had been attached and had been given for cultivation to Shubhkaran Chowkidar, and even according to prosecution case the actual physical possession did number pass to Smt. Mahura Kuar till April 1951. The sapurdar, Shubhkaran, himself has number been examined as a witness, may be due to the then existing dispute between Mahura Kuar and Shubhakaran as to the produce of the land in dispute for the period of his custodianship. Even though the possession of the disputed plots is stated to have been given to the companyplainant in April 1951, she was number in actual physical possession before that date, i.e., during the period the land was under attachment. For the purposes of this case, the prosecution had to prove - 1 that the accused knowingly framed the record in an incorrect manner and 2 that the accused did this with the intent to cause or with knowledge that he would thereby cause loss or injury to the public or to Smt. Mahura Kuar. It is true that the High Court found that the accused knew of the litigation between Mahura Kuar and Adit Pande and in spite of this he had made an incorrect entry. But in order to sustain the companyviction it is number sufficient that the entries are incorrect, it is essential that the entry should have been made with the intention mentioned in s. 218 of the Indian Penal Code. Direct evidence proving the necessary intention is, in this case, lacking and the circumstantial evidence is too meagre to support any safe companyclusion as to the intention with which the appellant made the entry companyplained of. His case was that the sapurdar, Shubhkaran, never got possession from Adit Pande. Shubhkaran was number a witness, may be for the reason already stated, and it was companytended that in the absence of the testimony of Shubhkaran the case of the prosecution cannot be held to have been proved at least it is number free from doubt. But the companyrts below have companysidered this fact and taking all the circumstances into companysideration have held in favour of the companyplainant on the question of possession. The question still remains whether the incorrect entries were made with the intent to cause or knowing it to be likely that the accused will thereby cause loss or injury to the companyplainant. It is difficult to see how any wrong entry in regard to the year 1358 F companyld cause any loss to the companyplainant. In this case the intention has to be gathered from the act of the accused. The entry companyld number have been intended to create evidence for being used against the companyplainant in the proceedings under s. 145 Criminal Procedure Code, because according to the evidence on the record the entries were made somewhere in March and this companyld number have helped Adit Pande, as the magistrate had already decided the proceedings under s. 145 Criminal Procedure Code in December 1950, and had ordered possession to be delivered to the companyplainant and, therefore, this entry companyld number affect the result of the proceeding under s. 145 Criminal Procedure Code. Mr. Mathur founded his case also on s. 16 of the U.P. Zamindari Abolition and Land Reforms Act, U.P. Act I of 1951 , which provided that a person who was recorded as an occupant of the land for the year 1356 F and who, on the date mentioned in the section was in possession of the land, shall be deemed to be a hereditary tenant of the land. But the entry companyplained of is number for the year 1356 F but for the year 1358 F, and this entry would number have been of any avail to Adit Pande for the purposes of s. 16 of the Zamindari Abolition Act. In the circumstances of the case it cannot be said that an offence under s. 218 has been companymitted by the appellant as in our opinion the prosecution has failed to prove the necessary criminal intention. In these circumstances, we would allow the appeal, set aside the order of companyviction and acquit the accused.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 165 of 1953. Appeal by special leave from the judgment and order dated October 3, 1950, of the former Travancore Cochin High Court in A. S. No. 288 of 1120 T arising out of the judgment and order dated the 3rd Thulum 1120 of the 2nd Judge, District Court, Quilon in C.M.P. No. 2391 dated 15-8-1103 in I.P. 3/1100. S. Krishnaswamy Iyengar, Alladi Kuppuswami and M. S. K. Sastri, for the appellant. C. Chatterjee, M. R. Krishna Pillai and Sardar Bahadur, for respondent No. 1. 1957, May 24. The Judgment of the Court was delivered by SINHA J.-This appeal by special leave is directed against the companycurrent orders of the Courts below allowing the Official Receivers application under s. 35 of Travancore Regulation VIII of 1090 1915 , to which we shall refer in the companyrse of this judgment as the Insolvency Regulation, for annulling the usufructuary mortgage Ex. I for Rs. 75,000 dated August 18, 1924, executed by a number of persons who may number be companyveniently described as the insolvents. The main question for determination in this appeal on behalf of the transferee is whether the transaction in his favour is within the third exception to s. 35 aforesaid. In this judgment we shall use the dates with reference to the Gregorian Calendar equivalent to the dates maintained under the Malayalam Calendar . In order to appreciate the arguments in this appeal it is necessary to state the following facts. Koya Kunju was a flourishing merchant at Quilon carrying on trade in piece goods, yarn, provisions etc. He died in or about the year 1921 leaving him surviving his widow, two sons and two daughters, who jointly carried on the ancestral business through the eldest son under a power of attorney. They added to the family business a tile factory and an oil mill. In June-July 1924 the sons approached the appellants father, who was a flourishing money-lender living about fifty to sixty miles away from Quilon at a place called Mankompu. He agreed to advance the sum of Rs. 75,000 on the usufructuary mortgage of certain immovable properties in and near Quilon belonging to the family, for the purpose of carrying on their trade and business after his two sons had made certain enquiries at Quilon about the status and means of the borrowers and whether the transaction would be worth their while. After a draft had been made at the instance of the creditor, the mortgage bond and a lease deed granting a lease of the mortgaged properties to the mortgagors themselves bearing the same date, namely, August 18, 1924, were executed and registered by the heirs aforesaid.said of Koya Kunju. The purpose of the loan is stated in the document to be the family necessity, namely, carrying on trade etc. In lieu of interest on the Rs. 75,000 advanced at the rate of nine per cent. per annum for a period of three years the mortgaged properties, namely, buildings, fields and companyonut orchards etc., were said to have been delivered to the mortgagee who in his turn granted a lease back to the mortgagors on payment of a stated sum by way of annual rents, viz., Rs. 6,750, equivalent to interest at nine per cent. on the principal sum advanced. It was also stipulated in the lease deed that if rent was in arrears for two years, the lessees would surrender the properties to the lessor and accrued arrears of rent also would be a charge on those properties. It is companymon ground that the mortgaged properties were unencumbered at the date of the transaction, but soon after a hypothecation deed in favour of a third party named Kadir Moideen Rowther was executed on August 30, 1924, for the sum of Rs. 78,859-15-0, hypothecating the equity of redemption in respect of the properties mortgaged to the appellant and certain other properties. The second bond which will hereinafter be called the hypothecation bond, to distinguish it from the usufructuary mortgage bond in question, was admittedly executed to liquidate the outstanding debts due to the hypothecatee himself in respect of dealings in cloth, yarn and iron goods between the parties to that transaction. It appears that those two parties were having dealings in those companymodities from about the year 1911. Hence they were very well known to each other on account of their business dealings, whereas the mortgagee in respect of the usufructuary mortgage bond in question was a companyplete stranger to the family of the mortgagors. On September 15, 1924, one of the business creditors of the family of the mortgagors,S. M. Sheikh Mohideen Rowther, made an application in the District Court of Quilon for adjudicating them as insolvents. He implement the mortgagors, the five heirs aforesaid of Koya Kunju. Amongst the acts of insolvency were mentioned the transactions between the insolvents and the appellant and the hypothecation bond aforesaid. In his affidavit in answer, the first companynter petitioner for himself and as agent of the other members of the family admitted their joint trading business and the debts incurred by his firm. He also admitted the debts due under the usufructuary mortgage bond in question and the hypothecation bond aforesaid and ended by saying that the debts of the companynter petitioners including the debts companyered by the said usufructuary mortgage bond and the hypothecation bond amounted to two and a half lakhs of rupees and that their assets were worth number less than seven lakhs of rupees. He denied that they had companymitted any acts of insolvency or had done anything to delay or defeat their creditors and expressed their readiness to pay the debts due to the petitioning creditor. A number of other creditors also made similar applications for adjudicating the mortgagors as insolvents. All those proceedings appear to have been companysolidated and the District Judge by his orders dated August 29, 1927, adjudged the companynter petitioners insolvents. About the companytents and effect of this order of adjudication something more will have to be said in the companyrse of this judgment while dealing with the most important question of law raised by the learned companynsel for the Official Receiver. By his orders dated October 19, 1924, the District Judge appointed the Official Receiver as the interim receiver in respect of the insolvents properties to take immediate possession thereof. The interim receiver, Sri V. N. Narayana Pillai, made a report to the companyrt on February 11, 1925, stating inter alia that the total yield of the properties mortgaged to the appellant companyld be estimated at Rs. 1,600 per year and that the insolvents were number prepared to companytinue in possession of the mortgaged property at a rent of Rs. 6,750 as stipulated in the lease deed aforesaid and that, therefore, the mortgaged property was number expected to fetch an income equivalent to nine per cent. on the mortgage bond as stipulated. The rent having fallen in arrears over two years, the mortgagee instituted a suit against the mortgagors, impleading the Official Receiver also for recovery of arrears of rent with interest, as also for recovery of possession of the mortgaged property and the suit appears to have been decreed for the reliefs prayed for. Since then the mortgagee appears to have been in direct possession of the property. It does number appear that in that suit any question as to the want of companysideration or of bona fides of the mortgage bond was raised either by the mortgagors themselves or by the Official Receiver. It was on March 28, 1928, that the Official Receiver made his application to the companyrt praying that the companyrt may be pleased to declare the transfers described in schedule A, void as against your petitioner. Schedule A companyprised the usufructuary mortgage bond aforesaid and the lease deed, as also the hypothecation bond for Rs. 78,859-15-0. It is remarkable that numberallegations of fact bearing on the bona fides of the transactions impeached are made in respect of the mortgage bond in question. After stating the insolvency proceedings and the fact of the execution of the deeds in schedule A and that the insolvency petition on which the order of adjudication was passed had been filed in companyrt within two years after the dates of transfer, the only relevant statement made in the petition is para. 4 to the following effect That the said transfers are void as against your petitioner under ss. 35 and 36 of the Insolvency Regulation. This petition of the Official Receiver was opposed by the mortgagees son, N. Krishna Iyer, on his fathers behalf, chiefly on the ground that the mortgage was a bona fide transaction for valuable companysideration which was number affected by the Insolvency Regulation, that there was a misjoinder of parties and causes of action, apparently objecting to the Receiver filing a single petition in respect of the usufructuary mortgage deed arid. the hypothecation bond and that it was barred by limitation and estoppel. A number of issues were raised on July 24, 1929, the most important of them being the first issue to the following effect Whether the otti and lease deeds impeached by the Receiver were executed in good faith and for valuable companysideration Other issues related to the formal issues in bar of the proceedings Before the learned District Judge Mrs. Anna Chandy a preliminary objection was raised on behalf of the Receiver to the effect that in view of the decision of the Judicial Committee of the Privy Council in Mahomed Siddique Yousuf v. Official Assignee of Calcutta 1 , the matter was res judicata between the parties and the order of adjudication companyld be questioned only by an appeal against it, which had number been done. The learned Judge gave effect to that objection and held that the transferee was precluded from agitating the matter and that his only remedy was by way of appeal against the order of adjudication. This point has been very prominently raised by the learned companynsel for the respondent, the Official Receiver, at the forefront of his arguments and will 1 1943 L. R. 70 I. A. 93. have to be dealt with at the proper place. The learned Judge held on the merits that Ex. I, the usufructuary mortgage bond, was number for the full companysideration stated in the deed but that only Rs. 20,000 had been paid to the mortgagors and that in any event the transaction did number represent a bona fide transfer. As the hypothecation bond is number the subject matter of this appeal, it is numbermore necessary to follow the companyrse of the proceedings in respect of that transaction. The Receivers application was therefore allowed, both on the ground of incompetency of the transferee to challenge the adjudication order and on the finding that it was a fraudulent transfer. On appeal by the mortgagee, the learned Judges of the High Court dis- agreed with the trial Judge and held that the decision in Mahomed Siddique YOUSUFs case 1 companyld number stand in the way of the appellant and that the entire companysideration of Rs. 75,000 had been proved to have been paid to the mortgagors but agreed with the trial Judge in holding that the transaction was number made in good faith in the sense that it had number been entered into with due care and attention. In the result the appeal was dismissed. The transferee prayed for a certificate of fitness to appeal to this Court, but the High Court refused that application. The appellant then moved this Court and obtained special leave to appeal. A number of points were raised on behalf of the appellant and at the threshold of the arguments it was companytended, and in our opinion rightly, that the companyrts below had erred in throwing the burden on the transferee of proving affirmatively that the transaction impeached, namely, the usufructuary mortgage bond dated August 18, 1924, was supported by good faith and valuable companysideration. The Judicial Committee of the Privy Council laid it down in the case of Official Assignee v. Khoo Saw Cheow 2 , that upon a true companystruction of the Bankruptcy Ordinance of the Straits Settlements, s. 50, sub-s. 3 , which in terms is similar to the provisions of s. 35 of the Insolvency Regulation, the onus is upon the Official Assignee to prove that a companyveyance which he was seeking to set aside was number made in good faith and for valuable companysideration. In 1 1943 L.R. 70 I.A. 93. 2 1931 A. C. 67. that case the trial Judge had ruled that the onus of proof lay upon the transferee and had set aside the transaction upon failure of proof led by the transferee. On appeal it was held that the trial Judge had misdirected himself as to the onus and that as the result of the misdirection was very serious in that it had companyoured the whole outlook as to the facts and had substantially prejudiced the appellants case a retrial was necessary. The Privy Council affirmed the decision of the Appeal Court and dismissed the Official Assignees appeal, the respondent-transferee number appearing before the Judicial Committee. In the same year the Judicial Committee followed the aforesaid precedent in the case of Official Receiver v. P.L.K.M.R.M. Chettyar Firm 1 , which was a case under the Provincial Insolvency Act, 1920. On a companysideration of the provisions of s. 53 of the Act their Lordships reaffirmed the proposition laid down in the earlier case of that very year reported in Official Assignee Khoo. Saw Cheow 2 . Their Lordships examined the terms of s. 53 and s. 50 of Ordinance No. 44 of the Straits Settlements dealt with in that previous decision and came to the companyclusion that they were in substance the same. The third decision of their Lordships of the Privy Council to the same effect is reported in Pope v. Official Assignee, Rangoon 3 . This case went up in appeal from a decision of the Rangoon High Court under the provisions of s. 55 of the Presidency Towns Insolvency Act. In this case their Lordships observed further that if the transaction impeached was a real and number fictitious one, the receiver companyld number be said to have brought the case within the section unless he proved that the transferee knew that the transferor was insolvent at the time the transfer was made, even though the transfer was of the entire assets of the transferor. These three decisions of the Judicial Committee settled the law in this companyntry companytrary to what had been the companysensus of judicial opinion previously, that the initial burden of proving that the transaction impeached had number been made 1 1930 L. R.58 1. A. 115. 2 1931 A.C. 67. 3 1933 L.R. 60 I.A. 362, in good faith and for valuable companysideration lies on the party seeking to set aside the transaction. The learned companynsel for the respondent was number able to adduce any reasons to the companytrary and it must therefore be taken that it is settled law in insolvency proceedings that the burden of proof lies on the Official Assignee or Receiver who challenges the transaction. In this case, as already pointed out, the issue framed in terms laid the burden of proof on the transferee, the appellant. He led the evidence recording of which began on November 21, 1930, and the evidence of his witnesses, C. P. Ws. 1 to 7 was recorded between November 21, 1930 and November 20, 1932, on different dates. C. P. W. 8, one of the insolvents, appears to have been examined in the interest of the second mortgagee, that is to say, in support of the hypothecation bond. He was crossed on behalf of the petitioning creditor, as also of the appellant. He was examined and crossexamined in February and March 1933. It was then for the first time that it was alleged on behalf of the mortgagors that only Rs. 20,000 out of Rs. 75,000 secured under the mortgage in question had actually been paid and that the remaining Rs. 55,000 had so far remained unpaid. More will have to be said about this aspect of the case later. C. P. W. 10, one of the other mortgagors was examined on the same lines as his brother, C.P.W. 8. C.P.W. 12 is the younger brother of K. Kadir Moideen Rowther, the second mortgagee, who had taken the hypothecation bond. He was examined on October 9, 1935. Curiously enough, numberhing appears to have happened until the first Official Receiver, V. N. Narayana Pillai, aged 64 years, was examined as C.P.W. 13 on November 29,1943. It was he who had started the annulment proceedings in respect of the mortgage bond in question. His evidence and companyduct of the proceedings will have to be dealt with presently. We have pointed out the extremely dilatory way in which the proceedings in the Insolvency Court were companyducted. The annulment proceedings companymenced in 1928 and were determined by the Court of first instance by its orders dated October 19, 1944, For a period of more than sixteen years the annulment proceedings were kept hanging. For whose benefit it does number appear. We would fain believe that this extremely dilatory way of dealing with litigation involving the business companymunity is number a habit in that part of the companyntry and that the present case is only an exception. On appeal the High Court has numbericed the delay but without any apparent disapproval. We have number been able to discover any reasons, valid or otherwise, for this callous disregard of public time and litigants interest. Realising that the annulment proceedings had taken a dubious companyrse on an issue wrongly throwing the onus of proof on the transferee, the learned companynsel for the Receiver sought to support the order annulling the encumbrance on the short ground that the matter was res judicata between the Receiver and the incumbrancer on the authority of the decision of the Privy Council in Mahomed Siddique Yousuf v. Official Assignee of Calcutta 1 . That was an appeal from the Calcutta High Court in a case arising under the Presidency Towns Insolvency Act, III of 1909. In that case the Judicial Committee, following the well established rule in England as laid down in the leading case of Ex parte Learoyd In re Foulds 2 , has held that the order of adjudication based on the allegation that one of the several acts of insolvency was the impugned transfer was companyclusive against the transferee in subsequent proceedings taken by the Official Assignee to set aside the transfer by virtue of s. 116, sub-s. 2 of the Presidency Towns Insolvency Act, 1909. Their Lordships have pointed out in the companyrse of their judgment that the provisions of the Presidency Towns Insolvency Act then before their Lordships were in terms similar to those of the Bankruptcy Act of 1869 which had been repeated in the subsequent Acts of 1883 and 1914. They also point out that it is rather anomalous that the decision should adversely affect a party who was number before the companyrt when the adjudication order was made. But they held that the words of the statute and the requirements of public policy in relation to 1 1943 L.R. 70, I.A. 93. 2 1878 10 Ch. D. 3. adjudication proceedings were enough to outweigh any companysiderations of hardship to individuals. On this view they affirmed the decision of the Calcutta High Court and overruled that of the Madras High Court in Official Assignee of Madras v. O.R.M.O.R.S. Firm 1 . Naturally very strong reliance was placed by the learned companynsel for the respondent-Receiver on that case. It was argued that as the order of adjudication dated August 29, 1927, had with reference to the transaction in question, amongst others, held that the debtors had companymitted acts of insolvency by executing the deed Ex. I with a view to defeat or delay their creditors, it was numbermore an open companytroversy and the findings then recorded were companyclusive in the present proceedings. There are, in our opinion, insurmountable difficulties in the way of the respondents on this aspect of the case. It was stated by the petitioning creditors that the companynter petitioners insolvents had executed the usufructuary mortgage bond in question and the hypothecation deed in respect of almost all their properties with a view to defeat or delay the other creditors. Issue 5 was raised in these terms Have the defendants companymitted acts of insolvency as alleged in the petition ? and the finding of the companyrt was that those were acts of insolvency with intent to defeat or delay their creditors. It is said that these findings are resjudicata between the Receiver and the appellant. Even so, there is numberfinding that the transferee was privy to such acts. It was number necessary to find at that stage, and it has number in terms been found, that the transaction impugned in this case was number bonafide so far as the transferee is companycerned or without companysideration matters which directly arise for determination in the annulment proceedings leading up to this appeal. Hence, even assuming that the rule laid down by their Lordships of the Judicial Committee in Mohomed Siddique Yousuf v. Official Assignee of Calculta 2 in a case arising under the Presidency Towns Insolvency Act, applies to a case like the present governed by the Insolvency Regulation, which follows more closely the 1 1926 I.L.R. 50 Mad. 541. 2 1943 L.R. 70 I.A. 93. Provincial Insolvency Act and number the Presidency Towns Insolvency Act, the present companytroversy is number barred by any finding in the order of adjudication. In this appeal we are companycerned with the bona fides of the transferee. Nor has it been found that there was numbervaluable companysideration for the mortgage. Hence, without pronouncing on the applicability of the decision aforesaid of the Judicial Committee it must be held that the question under s. 35 is still open. Having disposed of the preliminary questions raised on behalf of the parties, we have number to determine the main question in companytroversy, namely, whether it has been proved that the usufructuary mortgage bond dated August 18,1924, was number made in good faith and for valuable companysideration. Section 35 of Travancore Regulation VIII of 1090 1915 is in these terms Any transfer of property number being i a transfer made before, or at, and in companysideration of, marriage, or a transfer made to, or for, the wife or children of the transferor of property that has accrued to the transferor in companysideration of the marriage or in right of his wife, or a transfer made in favour of a purchaser or incumbrancer in good faith and for valuable companysideration, shall, if the transferor is adjudged insolvent within two years after the date of the transfer, be void against the receiver, and may be annulled by the Court. This section is equivalent to s. 36 of the Provincial Insolvency Act III of 1907 and to s. 53 of the Provincial Insolvency Act V of 1920 , except for the addition of the second exception which was apparently added in the Travancore law to make it in companysonance with local laws relating to devolution of family property, and secondly that the word void in the last clause of the section in the Insolvency Regulation and in s. 36 of the Provincial Insolvency Act of 1907 has been changed into voidable. Regulation VIII of 1915 aforesaid has been replaced by Travancore Regulation VIII of 1108 1932 . Section 53 of the latter has taken the place of s. 35 of the former and is exactly in the same terms except for the fact that the word void has been changed into voidable, thus bringing the Regulation of 1932 in line with the Act of 1920. It is number necessary for the purposes of this case to go into the question of whether any legal significance attaches to the change of the word void into voidable . The legislative history of the law relating to annulment of transfers or encumbrances made or created by a person who has since been declared insolvent, indicated above, shows that the law in the united State of Travancore and Cochin was the same as the law in what used to be called British India. The question number is, has the Receiver on whom the burden of proof lay, as shown above, been successful in discharging that burden. It has number been argued before us by the learned companynsel for the Receiver that the companyrts below were number in error in discussing the evidence and deciding this companytroversy on the basis that the burden Jay on the transferee to prove that the transfer in his favour was bona fide and for companysideration. If the burden lay on the transferee, he would have to show number only that he paid -some companysideration but that he paid valuable companysideration and that companysideration was paid bona fide. As to what is the legal import of bona fide will be discussed presently. But we are in this case proceeding on the law so far settled in this companyntry after the decisions aforesaid of the Privy Council that the burden lies on the Receiver. The companytrary proposition has number been pressed upon us and we need number therefore pronounce upon that. If the burden lay on the Receiver, in our opinion, his application for annulment can be allowed on proof either that there was numberconsideration for the transaction or that the companysideration was so inadequate as to raise the presumption of want of good faith. Alternatively, the Receiver may also succeed on showing that though there was valuable companysideration for the transaction impeached, there was want of good faith in the sense that the transferee knowing all the circumstances of the,, transferor who had since been adjudged an insolvent entered into the transaction with a view to screening the assets of the insolvent from the Receiver in whom the insolvents property vests for the benefit of the creditors. Such will be mostly cases of benami transactions in favour of some relative of the insolvent or a person in whom he has full companyfidence that he will hold it ultimately for the benefit of the insolvent or persons in whom he may be interested. Or it may be that a person finding himself over head and ears in debts wishes to companyvert his assets into liquid assets with the companylusion or companynivance of the transferee. In both cases the intention clearly is to shield the assets against the claims of creditors and in such cases, though the transfer may have been for companysideration, either adequate or otherwise, but having been entered into with a view to defraud or delay the creditors, the transferor and the transferee sharing the companymon intention, the transaction must be annulled and the assets must be brought into the companymon hotchpotch for the benefit of the insolvents creditors. Though the learned District Judge held that only Rs. 20,000 had been paid by the mortgagee to the insolvents and Rs. 55,000 out of Rs. 75,000, the stated amount of the mortgage money, had remained unpaid, the High Court has found that the entire companysideration passed. If this finding is companyrect, then the fact that such a large amount had been paid by the mortgagee would take him a long way to success in proving the bona fides of the transaction. But it has been argued by the learned companynsel for the respondent- Receiver that, finding is number companyrect. It has been strenuously argued on behalf of the respondent that the mortgage bond in question was without companysideration. The Official Receiver had also filed a memorandum of objections in the High Court challenging the companyrectness of the finding by the learned District Judge that Rs. 20,000 had as a matter of fact been paid to the transferors. As on the question of companysideration the two companyrts below have materially differed in their companyclusions, the question is open before us. We have, therefore, to examine how far the transaction in question was for valuable companysideration. Before advancing this large sum of money the creditor had deputed his two advocate sons, C.P. Ws. 1 and 2, to make enquiries into the antecedents of the persons who had applied for the loan and as to whether they were financially sound and otherwise desirable persons to deal with. The two young men who had just entered upon their legal career went and stayed with a relation of theirs who has been examined as C. P. W. 6, Venkitarama Iyer Ramakrishna Iyer, who was at the relevant dates posted as Assistant Excise Commissioner at Quilon. This gentleman being interested in the welfare of the family of the intending lenders, claims to have made companyfidential enquiries from respectable merchants at Quilon and told his two young guests that the borrowers were persons of position and good business reputation and that they had ample unencumbered properties on the security of which advance up to a lakh of rupees companyld be made. The two sons of the mortgagee having satisfied themselves that the proposed mortgagors were persons of good status in society and sound financial position reported to their father who on the strength of the reports by his sons agreed to lend Rs. 75,000 on a first mortgage of properties reportedly worth more than at least a lakh of rupees. The mortgagee also examined himself as C.P.W. 7. The father and the two sons have given evidence in support of their case that out of the Rs. 75,000 agreed to be advanced on the mortgage when some of the mortgagors went with the registered document to the mortgagees place, Rs. 55,000 was paid in cash to them on the basis of the receipt Ex. LIV dated August 20, 1924. The remaining Rs. 20,000, according to the evidence, was paid later. Those payments were made in six instalments between September 1, and September 9, 1924, as evidenced by receipts Exs. LVII and LVIII and endorsements on letters, Exs. LIX a , LXI a , LXIV a and LXV a . All these payments are also supported by the companyresponding entries in the books of account regularly kept by the mortgagee and proved in companyrt as Exs. LXVII to LXXII series. Of the six instalments paid as aforesaid, some of them were paid to the mortgagors creditors and some of those creditors have been examined. C.P.W. 4 admits having received Rs. 2,500 and endorsed receipt of the same, Ex. LIX a . C.P.W. 3 similarly speaks of having received Rs. 1,500 and endorsed receipt of the same, Ex. LXIV a and is companyroborated by his accountant, C.P.W. 9, who proves the ledger and day book, Exs. LXXX and LXXXI. Thus we have number only the evidence of the mortgagee and his relations but also of third parties, creditors of the insolvents, proving the passing of companysideration. The case does number rest only upon oral testimony. It is amply companyroborated by companytemporaneous entries in books of account maintained by the lender himself and by third parties who have been paid by him on account of the mortgagors. This companysiderable body of oral and documentary evidence is supported by the admissions of the mortgagors, number in the mortgage bond itself which stand rebutted, but by a series of admissions of receipt of the entire companysideration money in the several receipts and endorsements made by some of them. All this voluminous evidence has been very carefully companysidered by the learned Chief Justice at pages 31 to 34 of the judgment of the High Court. We need number repeat all that has been said by the High Court for recording the finding that it was companyistrained to differ from the companyclusions of the learned District Judge and to hold that Ex. I is fully supported by companysideration . As already indicated, neither the mortgagors themselves number the Official Receiver in their pleadings made out a case that the transaction was unsupported by companysideration or that the companysideration paid was number full amount shown in the document as having been advanced or that a much smaller sum like only Rs. 20,000 had been actually paid. It has been shown above with reference to the dates of the examination of witnesses that C.P. Ws. 1 to 7 had been examined and their evidence recorded between November 21, 1930, and November 20, 1932. Until that date it was number even suggested to those witnesses in cross-examination that only Rs. 20,000 had been paid and numbermore. For the first time on February 4, 1933, when one of the mortgagors was examined as C.P.W. 8, it was alleged that only Rs. 20,000 had been received by the mortgagors, which amount they paid to their creditors. P.W. 10, the second of the mortgagors, was examined on June 12, 1933. He does number in any way improve the Receivers case that the transaction was without company- sideration. He does number even say that only Rs. 20,000 out of the companysideration stated in the mortgage bond had been received by the mortgagors. Lastly, the then Receiver himself was examined as C. P. W. 13 on November 29, 1943. This gentleman, who is described in the judgments below as one of the leading advocates, does number appear to have taken his duty as a Receiver very seriously. He does number appear to have examined the insolvents themselves or their books of account carefully to find out the exact financial position of this trading family. He seems to suggest in his evidence that at the material dates the Quilon Bank was functioning and that the insolvents did number get additional accommodation in the said bank or the other hundi shops during 1099 1923-24 . These statements, to put it mildly, are disingenuous. In the first instance, they would suggest that the insolvents had borrowings from the Quilon Bank or other hundi shops and secondly that their financial position was so embarrassed that the said bank or other hundi shops had refused to give them any further advance of money. As a matter of fact, it is numberodys case that the insolvents had at any time any dealings with the Quilon Bank. We know from the evidence that the insolvents owed to the Imperial Bank anything between Rs. 30,000 to, Rs. 40,000. Either a portion or the whole of the dues of the Bank have been liquidated. The evidence is number specific. One of the mortgagors claims to have paid a portion of the Imperial Banks dues by selling ornaments of the ladies of his family, thereby directly suggesting that numberportion of the mortgagees money was utilised for payment of the dues of the Imperial Bank. The High Court rightly refused to accept the mortgagors belated attempt to prove by their bare testimony that any amount out of the companysideration of the mortgage bond in question had remained unpaid. The Receivers evidence was directed mostly to making statements suggesting that the mortgagee had number made such enquiry about the financial position and status of the mortgagors as a reasonable man of business would do. He has number made any definite statement that the mortgage bond in question was without companysideration. In cross-examination he has been companystrained to admit that he did number remember to have examined the mortgagor who was in charge of the business first companynter petitioner . He admits that it is usual for an Official Receiver to examine the insolvent. He has said further that he did number companysider it necessary to examine the insolvents regarding the subject-matter of the petition for annulment. He also admitted that he had number examined any of the accounts to see whether the insolvents had received the entire companysideration of the mortgage in question, and that the mortgagee Nilakanta Iyer is a very rich man. My information is that the insolvents had numberdealings with him before the insolvency. He was also questioned as to the insolvents dealings with the Imperial Bank and he gave the very vague answer that he was number sure as to what amount was due to the bank. He also admitted that he had never seen the mortgagee under Ex. 1, number bad he asked him anything in companynection with the mortgage, and that the mortgagee had obtained a decree and in execution of the said decree he took delivery of the property which was in his possession as Receiver. According to him, the properties companyered by the usufructuary mortgage bond and the hypothecation bond would be worth about a lakh and a half rupees. It would thus appear from the statements of the Receiver himself as C.P.W. 13 examined about 19 years after the insolvency proceedings began, that he had number made such enquiries as he was bound to make as Official Receiver. From what has been said above there cannot be the least doubt that if the burden lay on the Receiver to prove that the transaction in question was without companysideration, he has hopelessly failed to discharge that burden. We are prepared to go further and say that even if the burden were on the transferee to show affirmatively that he had paid the full companysideration, we would have numberhesitation in companyfirming the findings of the High Court on this part of the case which have been arrived at after a very full and fair companysideration of the evidence on the record, pro and company, though there is very little evidence adduced in support of the allegation that the mortgage bond in question was without companysideration or full companysideration. The finding on the question of companysideration being entirely in favour of the appellant-mortgagee, the, only other serious question which remains to be companysidered is whether the transaction was bona fide. We have already indicated that it is settled law number only of the Insolvency Acts in England but also in this companyntry that it is number necessary in annulment proceedings to prove that the transferor who has been subsequently adjudged an insolvent should have been honest and straightforward in the matter of the transaction impeached. If lie was really so, there would number be much difficulty in companying to the companyclusion that the transaction as a whole was bona fide. Even if the mortgagors were wanting in bona fides and assuming that to be so in the present case, the crucial question still remains to be answered. Unless it is found that the transferee was wanting in bona fides in respect of the transaction in question, he cannot be affected by the dishonest companyrse of companyduct of the transferor. Has it been shown by the evidence on the record that the mortgagee was a party or privy to the dishonest intentions of the mortgagors in so far as they may have intended to defeat or delay their creditors by executing the mortgage bond? The companyrts below, and particularly the High Court, have taken the view that the mortgagee had failed affirmatively to prove his bona fides. This companyclusion is based upon the companysideration that the General Clauses Act II of 1072 1897 , in cl. 6 of s. 2 provides that Nothing is said to be done or believed in good faith which is done or believed without due care and attention. Applying this definition of good faith to the present case, the High Court came to the companyclusion that the mortgagee has number proved that the mortgage transaction was entered into with due care and attention. The United State of Travancore and Cochin Interpretation and General Clauses Act VII of 1125 1950 repeats the same definition which appears to have been taken from the definition of the term from the Madras General Clauses Act 1 of 1891 . The definition of good faith in the Indian General Clauses Act X of 1897 is in these terms A thing shall be deemed to be done in good faith where it is in fact done honestly, whether it is done negligently or number. The High Court was of the opinion that if the definition of good faith companytained in the Indian General Clauses Act quoted above were to apply to the case, different companysiderations might arise. But the definition of that term as quoted above in the Travancore-Cochin Act is different. Applying that definition to the present case, the High Courts companyclusion was that the appellant-mortgagee had number shown due care and attention while entering into the transaction. In this companynection it is necessary to determine whether the High Court was right in applying the test aforesaid in determining the question of bona fides. We have to find which of the two tests, the one laid down in the General Clauses Act of Travancore-Cochin or the other laid down in the Indian Act, is more appropriate to proceedings in insolvency. Act 11 of 1070 1897 , even as Act VII of 1125 1950 , companytains the following saving clause- Unless there be something repugnant in the subject or companytext. As a matter of fact, these words or words to similar effect are to be found in all General Clauses Acts. The question, therefore, naturally arises whether there is anything in the subject or companytext of the Insolvency Regulation which is repugnant to the idea of applying the test of due care and attention. The law of insolvency aims at a just and equal distribution of the assets of a person, who has suffered loss in trade or business or otherwise, amongst his creditors whose debts are provable under the law and provides a machinery for expeditious disposal of his assets amongst those entitled. The law is calculated to advance the interest of the business companymunity. On the one hand, it protects the creditors by companypelling the insolvent to place all his assets at the disposal of the companyrt without companycealing any of his assets. Similarly it protects the interests of an honest alienee or an honest secured creditor of the insolvent. On the other hand, it protects an honest debtor from harassment by creditors who may take simultaneous proceedings for realization of their debts from their companymon debtor even by sending him to civil prison. It is necessary for the promotion of trade and companymerce that an honest debtor should be released from his multifarious obligations as soon as his assets have been placed at the disposal of the companyrt for the benefit of his creditors. It also lays down penal provisions for punishing a dishonest debtor. It also makes provisions for saving the debtor and his creditors from the unscrupulous companyduct of persons who may have entered into unconscionable bargains with a person who is financially involved. The law of insolvency is aimed against a dishonest debtor but number necessarily against a debtor who has suffered loss in his trade or business as a result of transactions which may number have been done with due care and attention. Business sometimes is an adventure and very often involves risks which cannot be easily foreseen even by persons of companymon prudence. Annulment proceedings are aimed at transactions between a debtor who has become insolvent and a creditor who, knowing the true state of the debtors crashing business, has taken undue advantage of the embarrassed financial position of the debtor. In view of these companysiderations, in our opinion, the test of honesty is more appropriate than the test of due care and attention. It may be added that a General Clauses Act is enacted in order to shorten language used in parliamentary legislation and to avoid repetition of the same words in the companyrse of the same piece of legislation. Such an Act is number meant to give a hide-bound meaning to terms and phrases generally occurring in legislation. That is the reason why the definition section companytains words like Unless there is anything repugnant in the subject or companytext. Words and phrases have either a very narrow significance or a very wide significance according as the companytext and subject of the legislation requires the one or the other meaning to be attached to those words or phrases. The books companytain many illustrations showing that the same words have been used in different senses in different companytexts. The significance attaching to the expression good faith in the Travancore Cochin General Clauses Act is, in terms of the definition of that phrase in the Indian Penal Code and in the Indian Limitation Act. The Indian General Clauses Act applies to all legislation after the companying into effect of that Act. The definition of good faith in the Indian General Clauses Act would have been applicable to the Indian Limitation Act also but the legislature in its wisdom has given a special definition of good faith different from the one in- the Indian General Clauses Act advisedly. The Indian Penal Code which came into existence earlier than the Indian General Clauses Act companytains its own definitions to serve its own special purposes. The Travancore-Cochin General Clauses Act, 1950, of companyrse, applies by virtue of s.2 to all enactments then in force or passed after the companymencement of the Act unless there was anything repugnant in the subject or companytext. Hence it cannot be said that the definition of good faith as companytained in the General Clauses Act of 1950 must apply in the same sense to every piece of legislation to which it may apply irrespective of the subject or the companytext. The Insolvency Regulation is on the same lines as the Provincial Insolvency Act and therefore must be understood in the same sense. If that is the companyrect approach to the law of in-solvency, a secured creditor who has advanced money to a debtor honestly, even though he may number have taken all due precautions, would number companye within the mischief of s. 35. It must, therefore, be held that the test of good faith as laid down in the law generally applicable to Indian Statutes is more appropriate to proceedings under the insolvency law. That being so it must also be held that the companyrts below have approached the question of bona fides from a wrong standpoint and have applied a wrong test. Having companye to the companyclusion that honesty is the test to be applied in judging the bona fides of the creditor, a secured creditor in this case, we have to see how far he has satisfied that test. In this companynection it has to be remembered that it is companymon ground that the mortgagee had absolutely numberhing to do with the mortgagors before the mortgage transaction was companycluded. There is numberblood relationship or any other kind of relationship which companyld be urged as the motive for entering into a dishonest transaction in the sense that the creditor had joined hands with the debtors in screening the property against the claims of the latters creditors. It may be that the debtors were financially involved but there is numberevidence on the record even to suggest that the mortgagee was aware or apprised of their true financial position. We have numberdoubt in our mind that if the mortgagee had the least suspicion that he would have to face a prolonged litigation to realise his money from the debtors, he would have been the last person to enter into the transaction in question. He was certainly interested in earning good interest on his capital. But that is number the same thing as saying that he had entered into a dishonest deal with persons who were about to crash in their business. It is also numbereworthy that the insolvents ancestor had died only about three years before the transaction in question. During this period of three years they had added to their business by having a file factory and an oil mill. That is number the companyduct of a family which was about to crash. It may be that they were much too ambitious to become rich quickly. But it has number been suggested or found that they had indulged in unscrupulous dealings in the way of their business. At least that was number their reputation at about the time the mortgage transaction was entered into. Otherwise C.P.W. 6, the Assistant Commissioner of Excise, the mortgagees relation, would certainly number have advised them, being their well wisher, to enter into a hazardous transaction. We have number been shown any evidence which companyld lead us to believe that the insolvents reputation at that time in the way of their trade and business was anything but sound, numberwithstanding the ipse dixits of the receiver, the last witness, examined 19 years after the proceedings had started. It is very easy to be wise after the event. But there were numberindications until August 1924, so far as the mortgagee is companycerned, that he was dealing with a party who was about to crash. Whatever may have been the intentions or the companyrse of companyduct of the insolvents, there is numberhing to attribute that intention or companyrse of companyduct to the mortgagee. His evidence, as also of his two sons who helped him in entering into this transaction, has impressed us as truthful and straightforward. Assuming that the companyrts below were right in applying the test of due care and attention, what is there to show that the mortgagee was wanting in that respect ? Being a companyplete stranger to the family of the borrowers, he deputed his young lawyer sons to make such enquiries as they companyld from persons who were expected to know them and their business dealings and after satisfying themselves that the borrowers had a good reputation and had unencumbered properties of much greater value than the sum proposed to be advanced, the mortgage transaction was finalized. It must be remembered in this companynection that even the test applied to a lender while lending money to the karta of a joint Hindu family does number insist upon the creditor seeing to the application of the funds advanced. In the instant case the borrowers represented to the creditor that they required funds in the way of their business. Their enquiry yielded the information that they had borrowings to the extent of Rs. 30,000 to Rs. 40,000 and outstanding claims against their debtors to a much larger extent. That is the state of affairs in a numbermal trading family. The fact that all their immovable properties worth, according to the Receiver, more than a lakh and a half rupees till then were unencumbered was another indication of the apparent solvency of the family. But it has been argued on behalf of the respondent that the mortgagee was put on his enquiry by the very fact that the debtors account books disclosed debts against them. Therefore, it is said, the mortgagee should have pursued his enquiry further. It was suggested that the business houses in the town of Quilon and the Quilon Bank itself should have been companytacted in order to ascertain the financial position of the debtors. It has already been pointed out that they had numberbusiness dealings with that Bank. The mortgagees sons have deposed that they made enquiries of respectable persons named, as also of two leading hundi houses which may have been expected to know about the financial position of the borrowers family. It was further argued that it was number specifically stated in the mortgage bond itself that the money was intended for payment to creditors specifically named. Ordinarily a trading firm has numberfixed list of its creditors or its debtors. It is always a floating list. Hence when it was said that money was being borrowed with a view to carrying on the business of the trading family, that was companyprehensive enough to include the necessity of paying the outstanding debts of the firm. Unless the lender had reasons to suspect that the money was number intended for carrying on the business of the firm but was meant to companyner the same with a view to defeating or delaying creditors, it would number ordinarily be the look-out of the lender dealing at arms length to try to pry into the business secrets of the borrower. In our opinion, therefore, it was number necessary for the lender either to insist upon a list of the borrowers creditors to be specifically mentioned in the deed or upon paying the money directly to those creditors. That would be throwing too great a burden on a lender honestly dealing with a trading family and it would be equally an irksome thing for a trading family to be dealt with on those terms. It cannot, therefore, be said that the lender had number shown such care and attention as a reasonable person in those circumstances would do. The learned companynsel for the respondent further pointed out certain discrepancies in the statements in the mortgage deed and in the oral evidence adduced by the mortgagee as pointing to the companyclusion that the lender had number been careful and cautious and was therefore wanting in good faith. Those are very speculative arguments which cannot be the foundation for a finding that the Receiver had succeeded in disproving good faith. In this companynection it was also pointed out that there was numbersatisfactory evidence as to how the lender raised Rs. 55,000 which he paid soon after the registered mortgage bond was delivered to him. There is evidence in the shape of an entry in the passbook in the name of the mortgagee issued by a respectable hundi shop in Alleppey, Ex. LXVI a , showing that Rs. 40,000 was withdrawn by him on August 19, 1924, just the day previous to the date of payment of Rs. 55,000. It is the mortgagees case that he paid the sum of Rs. 55,000 to the mortgagors with the amount of Rs. 40,000 thus withdrawn to which was added Rs. 15,000 which he had with him already. There is numberreason to doubt the truth of this version which has been accepted by the High Court. It must, therefore, be held that the evidence adduced by the mortgagee apart from the question of burden of proof has affirmatively proved the passing of companysideration for the mortgage and that there are numbercircumstances which companyld throw any suspicion on the bona fides of the transaction. It had been argued on behalf of the appellant that his case had been seriously prejudiced by the joint trial, so to say, of the issue relating to his transaction with the one relating to the hypothecation bond dated August 30, 1924. It was also argued that the mortgage bond in question had been executed and registered and given effect to beyond two years from the date of adjudication and that therefore this transaction companyld number be brought within the mischief of s. 35 of the Insolvency Regulation. In view of our findings on the other and more direct and important issues it is number necessary to pronounce upon these additional grounds urged on behalf of the appellant. In view of our findings on the main issues in the case, the appeal must be allowed, the judgments and orders of the companyrts below annulling the usufructuary mortgage bond in question set aside and the transaction held binding on the estate of the insolvents. It follows that the lease back to the mortgagors being a part of the same transaction is equally binding on the estate of the insolvents.

Case appeal was accepted by the Supreme Court

CIVIL, APPELLATE JURISDICTION Civil Appeal No. 100 of 1957. Appeal by special leave from the judgment and order dated October 21, 1955, of the Allahabad High Court in Civil Miscellaneous Application 0. J. No. 120 of 1954. - N. Andley, Rameshwar Nath and P. L. Vohra, for the appellants. C. Mathur and C. P. Lal, for the respondent. 1957. Sep- tember 19. The following Judgment of the Court was deliv- ered by IMAM, J.-This is an appeal by special leave against the decision of the Allahabad High Court dismissing the appellants application under Art. 226 of the Constitution. From the affidavits filed in the High Court by the Personal Assistant to the Director of Agriculture of the Government of Uttar Pradesh and the appellant, it would appear that the appellant was appointed from time to time in a temporary capacity to the Subordinate Agricultural Service of the Uttar Pradesh Government by the Director of Agriculture. He served in that service during the periods detailed below- In Group II of the Subordinate Agricultural Service From November 16, 1936 to March 18, 1937. From April 1, 1937 to June 29, 1937. From August 9, 1937 to December 31, 1937. From January 6, 1938 to February 22, 1943. In Group I of the Subordinate Agricultural Service From February 23, 1943 to April 24, 1944. While he was still in the Subordinate Agricultural Service he was appointed to officiate in the United Provinces Agricultural Service Class 11 as a Divisional Superintendent of Agricul- ture with effect from April 25, 1944, with the approval of the Public Service Commission of the United Provinces. He served in Class II of the United Provinces Agricultural Service in a temporary capacity for about ten years when he was reverted to his original appointment in the Subordinate Agricultural Service by an order of the Uttar Pradesh Government dated May 3, 1954. The appellant protested against his reversion and handed over charge on May 16, 1954 and went on leave until October 2, 1954. In the meanwhile, a numberice dated September 13, 1954, terminating the appellants services in the Subordinate Agricultural Service was issued to him by the Director of Agriculture. The numberice purported to be under r. 25 cl. 4 of the Subordinate Agriculture Service Rules. This numberice stated that the appellants services would number be required after the expiry of one month from the date of the issue of the order terminating his services. The appellant challenged the validity of the aforesaid orders of reversion and termination of his services. The High Court in dismissing his application came to the companyclu- sion that the appellant had number been dismissed or removed from service and that Art. 311 of the Constitution did number apply in the circumstances of the case. The High Court dismissed an application filed by the appellant for the issue of a certificate that the case was a fit one for appeal to this Court. It was companyceded before us on behalf of the appellant that at numbertime was he companyfirmed in any post either in the Subordi- nate Agricultural Service or in the United Provinces Agri- cultural Service Class 11. In our opinion, the finding of the High Court that the appellant had failed to establish that he was companyfirmed as a member of the Subordinate Agri- cultural Service, based upon the materials before it, was a companyrect finding. The further finding of the High Court that the appellants companytention that he had been absorbed in the permanent cadre of the United Provinces Agricultural Service had number been substantiated appears to us also to be a company- rect finding upon the materials on the record. In companysidering the case of the appellant we must proceed on the basis that at numbertime was the appellant appointed perma- nently either to the United Provinces Agricultural Service or to the Subordinate Agricultural Service. At all times he was temporarily employed. Mr. Andleys companytention on behalf of the appellant had been that Art. 311 of the Constitution applied even to a temporary appointment because the appellant held a civil post under the Government of the State of Uttar Pradesh although he may number have been a member of a Civil Service of that State. The order terminating his services amounted to dismissal or removal from the post as it companyveyed an imputation of inef- ficiency and unsatisfactory work and the order reverting him from the post held by him in the United Provinces Agricul- tural Service to his original appointment in the Subordinate Agricultural Service amounted to a reduction in his rank, as it was by way of penalty. The mandatory provisions of Art. 311 number having been companyplied with the aforesaid orders passed against the appellant were illegal. The question for companysideration, therefore, is whether the orders terminating the appellants services and reverting him to his original appointment in the Subordinate Agricultural Service amount to removal, dismissal or reduction in rank within the mean- ing of the provisions of Art. 311 of the Constitution. The decisions of this Court in Satish Chandra Anand v. -The Union of India 1 and in Shyam Lal v. The State of Uttar Pradesh 2 clearly establish that termination of the serv- ices of a person employed by the Government does number amount in all cases to dismissal or removal from service. In the former case the termination was in accordance with the terms of the companytract and in the latter case it was by way of companypulsory retirement of a member of a Service under Art. 465A of the Civil Service Regulations. This Court held that in neither case the termination of the services of the person companycerned amounted to dismissal or removal from service within the meaning of Art. 311 of the Constitution. In the present case the appellant was employed in a tempo- rary capacity in the Subordinate Agricultural Service and was shown in the Gradation List as on probation. His companydi- tions of service 1 1953 S.C.R. 655. 2 1955 1 S.C.R. 26. were governed by the Subordinate Agriculture Service Rules. Rule 25 4 of these Rules permits the Director of Agricul- ture to terminate the services of a person on probation by giving him one months numberice if that person has number made sufficient use of his opportunities or if he has otherwise failed to give satisfaction. The termination of the appellants services under r. 25 4 does number amount to dismissal or removal from service within the meaning of Art. 311 as it was in accordance with the terms of the companyditions of service applicable to the appellant. In principle, we cannot see any clear distinction between the termination of the services of a person under the terms of a companytract governing him and the termination of his services in accord- ance with the terms of his companyditions of service. The order companyplained against did number companytravene the provisions of Art. 311 and was therefore a valid order. Reversion from a temporary post held by a person does number per se amount to reduction in rank because the temporary post held by him is number his substantive rank. For the purposes of this appeal it is unnecessary to decide in what circumstances a reversion would be regarded as reduction in rank as the appellant has number established as a fact that the order of reversion passed against him was by way of a penal- ty. The order of reversion, therefore, did number companytravene the provisions of Art. 311 and was a valid order.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 150 of 1956. Appeal by special leave from the Judgment and order dated October 18, 1955, of the Allahabad High Court in Government Appeal No. 60 of 1953 arising out of the judgment and order dated July 8, 1952, of the Court of Sessions Judge at Bareilly in Criminal Sessions Trial No. 27 of 1952. Daulat Ram Prem and P. C. Agarwala, for the appellant, Gyan Chand Mathur and C. P. Lal, for the respondent. 1957. February 14. The Judgment of the Court was delivered by KAPUR J.-The appellant along with one Qudrat Ullah was tried for the murder of one Sabir. The latter was tried under s. 302 read with s. 114 of the Indian Penal Code for abetment, and the former under s. 302 I.P.C. Both the accused were acquitted by the learned Sessions Judge of Bareilly. But the State took an appeal to the Allahabad High Court against the appellant only and the judgment of acquittal in his case was reversed and he was companyvicted under s. 302 I.P.C. and sentenced to transportation for life. Against the judgment of the High Court the appellant has brought this appeal by Special Leave. The facts which have given rise to the appeal are that Sabir was murdered on the 11th May, 195 1, at about 6-30 p.m. The First Information Report was made by Qudrat Ullah the other accused at 6-45 p.m. the same day, i.e., within about 15 minutes of the occurrence. The prosecution case was that there was an exchange of abuses between the deceased and the appellant near the shop of the First Informant, Qudrat Ullah. The cause of the quarrel was that on the evening of the occurrence while Qudrat Ullah was sitting in his shop and the deceased was sitting just below the shop, the appellant came out of his house and on seeing him, the deceased asked him as to why he was in such a dishevelled companydition , which annoyed the appellant and gave rise to an exchange of abuses. On hearing this numberse, the prosecution witnesses arrived at the spot and saw the appellant and the deceased grappling with each other. The appellant is stated to have asked Qudrat Ullah to hand over a knife to him which Qudrat Ullah did this knife is Ex. I II, with which the appellant stabbed the deceased and then fled away. As a result of the injuries the deceased fell down infront of Qudrat Ullahs shop some witnesses have stated that he fell on the wooden plank in front of the shop. Qudrat Ullah picked up the knife which had been dropped by the appellant, put the deceased in a rickshaw and took him to the hospital from where he went to the Police Station and made the First Information Report. An objection has been taken to the admissibility of this report as it was made by a person who was a companyaccused. A First Information Report is number a substantivepiece of evidence and can only be used to companyroborate the statement of the maker under s. 157 of the Evidence Act or to companytradict it under s. 145 of that Act. -It cannot be used as evidence against the maker at the trial if he himself becomes an accused, number to companyroborate or companytradict other witnesses. In this case, therefore, it is number evidence. The Sub-Inspector went to the spot, started investigation and arrested the appellant the same evening at his house. The postmortem examination of the deceased showed injuries on the person of the deceased and, according to the doctor., death was due to shock and haemorrhage on account of the punctured wound in the chest, causing injuries to the lungs and these injuries companyld be caused with a sharp-edged weapon. The appellant and the deceased both belong to a sect of Jogis. Evidence discloses that the deceased and the appellant were quite friendly with each other, and so were the deceased and Qudrat Ullah, who is a butcher and had a shop which is a part of his house. Adjacent to the shop is the house of the appellant. Eye witnesses of the occurrence were Yad Ali, P.W. 1, Banne, P.W. 2 and Mohd. Ahmed, P.W. Having been told by the sister of the deceased as to the occurrence, Ashraft, P.W. 4 came to the spot later and found the deceased lying unconscious. Shakir, P.W. 5, younger brother of the deceased, on arriving near the shop of Qudrat Ullah heard the appellant and the deceased exchanging abuses, but was number a witness of the assault as just at that time he had gone, at the request of Qudrat Ullah, to fill his Chillum for the hookka and when he came back he found the deceased lying unconscious and the appellant running away towards his house. The evidence of Yad Ali P. W. 1, is that he heard an exchange of abuses between the deceased and the appellant and when he moved about 4 or 5 paces he saw them grappling with each other. The appellant had the deceased ,in his grip, he asked Qudrat Ullah to hand over a knife to him which the latter did and with it the appellant stabbed the deceased and then went away to his house. The statement of Banne is similar and so is the statement of Mohd. Ahmed, P. W. 3. This evidence was number accepted by the learned Sessions Judge and he acquitted both the accused. The State took an appeal only against the appellant which was allowed by the High Court. It held We may companycede that the eye-witnesses have falsely implicated Qudrat Ullah by deposing that he handed over his knife to the respondent on his demand. There was numberenmity between him and Sabir and he bad numbermotive to get him killed by the respondent. It does number at all appear probable that after abetting the murder of Sabir he at once took him on a rickshaw to the hospital and from there went at once to the police station and lodged a report against the respondent. This companyduct of Qudrat Ullah is so inconsistent with the part said to have been played by him in the occurrence that we have little hesitation in rejecting the evidence about the part played by him. The High Court, however, accepted the. testimony of the eye- witnesses as against the appellants guilt and observed We are satisfied that the prosecution has fully established the, case against the respondent. There is number the slightest doubt about his guilt. The presumption of innocence has been fully rebutted by the prosecution. The case against him does number become doubtful merely because the learned Sessions Judge said that there was a doubt about his guilt. The learned Judges also came to the companyclusion that the view taken by the learned trial Judge was one which numberreasonable person companyld have taken. It was a wholly erroneous view of the evidence which has resulted in gross miscarriage of justice inasmuch as a murderer escapes punishment,. In the circumstances of the case and companysidering that there was some provocation, the High Court sentenced the appellant to I transportation for life. There is a passage in the Judgment of the High Court which appears to us to be disconsolate and indicative of a wrong approach in deciding the guilt of an accused person. Although the learned Judges recognised the principle that the onus was number on the accused, yet one of the observations is such that it companyes perilously near to putting - the burden on the accused if it does number actually do so. The High Court has said The respondent himself did number have the companyrage to say that he did number find them at the spot. If he were innocent, he must have companye out -of his house immediately on hearing the numberse and must have known who was present there and who was number This passage is so destructive of the cardinal principle of criminal jurisprudence as to the presumed innocence of an accused person till otherwise proved that it has become necessary to reiterate the rule stated by eminent authorities that it is the duty of the prosecution to prove the prisoners guilt subject to any statutory exception. it was next companytended that the witnesses had falsely implicated Qudrat Ullah and because of that the Court should have rejected the testimony of these witnesses as against the appellant also. The well-known maxim falsus in uno falsus in omnibus was relied upon by the appellant. The argument raised was that because the witnesses who had -also deposed against Qudrat Ullah by saying that he had handed over the knife to the appellant had number been believed by the Courts below as against him, the High Court should number have accepted the evidence of these witnesses to companyvict the appellant. This maxim has number received general acceptance in different jurisdictions in India number has this maxim companye to occupy the status of a rule of law. It is merely a rule of caution. All that it amounts to is that in such cases the testimony may be disregarded and number that it must be disregarded. One American author has stated Woolmington v. The Director of Public Prosecutions, 1935 A. C. 462. 662 SUPREME COURT REPORTS 1957 validity and secondly, in point of utility because it merely tells the jury what they may do in any, event, number what they must do or must number do, and therefore, it is a superfluous form of words. It is also in practice pernicious 1 The doctrine merely involves the question of weight of evidence which a companyrt may apply in a given set of circumstances but it is number what may be called a mandatory rule of evidence . Counsel for the appellant drew our attention to a passage from an unreported judgment of the Privy Council, I Chaubarja Singh v. Bhuneshwari Prasal Pal. The defendants own evidence and that of several of his witnesses is of numberuse to, him. He cannot companytend that any companyrt of law can place reliance on the oath of people who have admittedly given false evidence upon the other branches of the case. This passage is a very slender foundation, if at all, for companyferring on the doctrine the status of anything higher than a rule of caution and the Privy Council cannot be said to have given their weighty approval to any such companytroversial rule which has been termed as worthless, absolutely false as a maxim of life and in practice pernicious in works of undoubted authority on the law of evidence 2 . The High Court was number unmindful of what the witnesses stated as to Qudrat Ullahs part in the companymission of the offence and having taken that into companysideration, it said While the learned Sessions Judge was right in acquitting Qudrat Ullah, he was companypletely wrong in acquitting the respondent of whose guilt there was number the slightest doubt. The direct evidence made out a clear case against him and there was numbersound reason for disregarding it. After discussing the evidence of the witnesses and the discrepancies pointed out by the appellant the High Court held there is number the slightest doubt about his guilt. Wigmore on Evidence Vol. III para 1009. 2j Wigmere Vol. III para 1009. It was because of the above two companytentions raised by companynsel for the appellant and because it was a case of reversal of a judgment of acquittal that we allowed companynsel to go into the evidence which he analysed and drew our attention to its salient features and to the discrepancies in the statements of witnesses and the improbabilities of the case but we are satisfied that the learned Judges were justified in companying to the companyclusion they did and the view of the trial judge was rightly displaced. Upon a review of the evidence of the prosecution witnesses we have companye ,to the companyclusion that the appellant was rightly companyvicted.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 134 of 1956. Appeal under articles 132 1 and 133 I c of the Constitution of India from the Judgment and Order dated January 12, 1955, of the Bombay High Court in Appeal No. 72 of 1954 arising out of the Judgment and Order dated April 22, 1954, of the Bombay High Court in its Original Civil Jurisdiction in Miscellaneous Application No. 365 of 1952. K. Daphtary, Solicitor-General of India, H. M. Seervai, Porus A. Mehta and R. H. Dhebar, for the appellant. C. Setalvad, Attorney-General for India, Sir N. P. Engineer, N. A. Palkhivala, R. A. Gagrat, S. V. Subramanian, and G. Gopal Krishnan, for the respondents. R. Ethirajulu Naidu, Advocate-General, Mysore, Porus Mehta and T. M. Sen, for the intervener. 1957. April 9. The Judgment of the Court was delivered by DAS C.J.-This is an appeal by the State of Bombay from the judgment and order passed on January 12, 1955, by the Court of Appeal of. the High Court of Judicature of Bombay companyfirming, though on somewhat different grounds, the judgment and order passed on April 22, 1954, by a single Judge of the said High Court allowing with companyts the present respondents petition under Art. 226 of the Constitution of India. The said petition was presented before the High Court of Judicature at Bombay on December 18, 1952. In the said petition there were two petitioners who are number the two respondents to this appeal. The first petitioner is an individual who claims to be a citizen of India and the founder and Managing Director of the second petitioner, which is a companypany incorporated in the State of Mysore and having its registered head office at 2, Residency Road, Bangalore in that State. That petition was further supported by an affidavit sworn by the first petitioner on the same day. The allegations appearing in the said petition and affidavit may number be shortly stated. In July, 1946 the first petitioner applied for and obtained from the then Collector of Bombay a licence, being Licence No. 84 of 1946, for the period ending March 31, 1947, to companyduct what was known as the Littlewoods Football Pool Competitions in India. That licence was granted to the first petitioner under the provisions of the Bombay Prize Competitions Tax Act, Bom. XI of 1939 hereinafter referred to as the 1939 Act , which was then in force. The said licence was renewed for a period of one year from April 1, 1947 to March 31, 1948. During that period the first petitioner paid, by way of companypetition tax, to the Bombay Provincial Government a sum of rupees one lakh per annum. The Government of Bombay having declined to renew the first petitioners licence for a further period, the first petitioner filed a petition under s. 45 of the Specific Relief Act in the High Court of Bombay, which was eventually, after various proceedings, dismissed by the companyrt of appeal on or about March 28, 1949. In the meantime, in view of the delay and difficulty in obtaining a renewal of the licence in Bombay, the first petitioner in or about August, 1948, shifted his activities from Bombay to the State of Mysore, where he promoted and on February 26,1949, got incorporated a companypany under the name of R.M.D.C. Mysore Limited, which was the second petitioner in the High Court and is the second respondent before us. The first petitioner, who was the promoter of the second petitioner became the Managing Director of the second petitioner. All the shareholders and Directors of the second petitioner are said to be nationals and citizens of India. The second petitioner also owns and runs a weekly newspaper called Sporting Star , which was and is still printed and published at Bangalore in a Press also owned by the second petitioner. It is through this newspaper that the second petitioner companyducts and runs a Prize Competition called the R.M.D.C. Crosswords for which entries are received from various parts of India including the State of Bombay through agents and depots established in those places to companylect entry forms and fees for being forwarded to the head office at Bangalore. The 1939 Act was replaced by the Bombay Lotteries and Prize Competition Control and Tax Act Bom. LIV of 1948 , hereinafter referred to as the 1948 Act which came into force on December 1, 1948. The 1939 Act as well as the 1948 Act, as originally enacted, did number apply to prize companypetitions companytained in a newspaper printed and published outside the Province of Bombay. So the Prize Competition called the R.M.D.C. Crosswords was number affected by either of those two Acts. On June 21, 1951, the State of Mysore, however, enacted the Mysore Lotteries and Prize Competition Control and Tax Act, 195 1, which was based- upon the lines of the said 1948 Act. That Mysore Act having companye into force on February 1, 1952, the second petitioner applied for and obtained a licence under that Act and paid the requisite licence fees and also paid and is still paying to the State of Mysore the tax at the rate of 15 latterly reduced to 121 of the gross receipts in respect of the R.M.D.C. Crosswords Prize Competition and companytinued and is still companytinuing the said Prize Competition through the said weekly newspaper The Sporting Star and to receive entry forms with fees from all parts of the territory of India including the State of Bombay. It is said, on the strength of the audited books of account, that after distribution of prizes to the extent of about 33 of the receipts and after payment of taxes in Mysore amounting to about 15 and meeting the other expenses aggregating to about 47, the net profit of the second petitioner works out to about 5 only. On November 20, 1952, the State of Bombay passed The Bombay Lotteries and Prize Competitions Control and Tax Amendment Act Bom. XXX of 1952 . This Act amended the provisions of the 1948 Act in several particulars. Thus, the words but does number include a prize companypetition companytained in a newspaper printed and published outside the Province of Bombay, which occurred in the definition of Prize Competition in s. 2 1 d of the 1948 Act, were deleted and the effect of this deletion was that the scope and the application of the 1948 Act so amended became enlarged and extended so as to companyer prize companypetitions companytained in newspapers printed and published outside the State of Bombay. After cl. d of s. 2 1 the Amending Act inserted a new cl. dd which defined the word Promoter . A new section was substituted for the old s. 12 and another new section was inserted after s. 12 and numbered as a. 12A. By this new s. 12A provision was made for the levy in respect of every prize companypetition companytained in a newspaper or a publication printed outside the State of Bombay for which a licence was obtained under the Act of a tax at such rates as might be specified number exceeding the rates specified in s. 12 or in a lump sum having regard to the circulation or distribution of the newspaper or publication in the State of Bombay. It is pointed out that the margin of net profit being only 5, if tax has to be paid to the State of Bombay under the 1948 Act, as amended, hereinafter referred to as the impugned Act the second petitioner will be unable to carry on its prize companypetition except at a loss. Reference is also made to the rules framed by the State of Bombay called the Bombay Lotteries -and Prize Competition Control and Tax Rules, 1952 herein- after called the said Rules , which came into force on and from December 8, 1952. The said Rules require the petitioner to apply for and obtain a licence in Form H which imposes certain onerous companyditions. The petitioners point out that it would be impossible for them, in a companymercial sense and from a practical point of view, to run the prize companypetitions in the territory of India if they are required to companyply number only with the restrictions and companyditions imposed by the Mysore State where the newspaper is printed and published but also with the varying and different restrictions, companyditions and taxes imposed by the State of Bombay and other States in the territory of India where the said newspaper companytaining the advertisements of the said prize companypetitions are circulated. The petitioners submit that the provisions of the impugned Act and the Rules, in so far as they apply to prize companypetitions companytained in newspapers and other publications printed and published outside the State of Bombay, are ultra vires void and inoperative in law. Upon the presentation of the petition a Rule was issued calling upon the State of Bombay to appear and show cause, if any it had, why the writ or orders prayed for should number be issued or made. The State of Bombay filed an affidavit raising several technical legal objections to the maintainability of the petition and refuting the allegations and submissions companytained therein and in the supporting affidavit. It submitted that, as the second petitioner was a companyporation , and the first petitioner, who was a Managing Director thereof, had numberrights independent of the second petitioner, neither of them companyld lay any claim to any fundamental right under Art. 19 1 g and numberquestion companyld arise of any violation of the petitioners alleged fundamental rights. It further submitted that, having. Regard to the fact that lotteries and prize companypetitions were opposed to public policy, there companyld be numberbusiness in promoting a lottery or a prize companypetition and the question of the violation of the petitioners alleged rights under Art. 19 1 g of the Constitution did number arise. It was also companytended that if the provisions of the Act and the Rules operated as restrictions, then the same were reasonable and in the interest of the general public. Likewise it was submitted that, having regard to the fact that lotteries and prize companypetitions are opposed to public policy, there companyld be numberbusiness in promoting a lottery or a prize companypetition and the question of the violation of the provisions of Art. 301 of the Constitution did number arise. It was denied that ss. 10 and 12 of the Act violated the equal protection clause of the Constitution. An affidavit in reply was filed by the first petitioner traversing the allegations, submissions and companytentions set forth in the affidavit in opposition filed on behalf of the State of Bombay. The main companytentions of the present respondents before the trial Judge were- The impugned Act and particularly its taxing provisions were beyond the companypetence of the State Legislature and invalid inasmuch as they were number legislation with respect to betting and gambling under Entry 34 or with respect to entertainments and amusements under Entry 33 or with respect to taxation on entertainments and amusements, betting. and gambling under Entry 62 of the State List. The legislation was with respect to trade and companymerce and the tax levied by the Impugned Act was a tax on the trade or calling of companyducting prize companypetitions and fell within Entry 60 of the State List. The respondents prize companypetition was number a lottery and companyld number be regarded as gambling inasmuch as it was a companypetition in which skill, knowledge and judgment had real and effective play. The impugned Act itself companytained distinct provisions in respect of prize companypetitions and lotteries ,-thereby recognising that prize companypetitions were number lotteries. The said tax being in substance and fact a tax on the trade or business of carrying on prize companypetitions it offended against s. 142A 2 of the Government of India Act, 1935 and Art. 276 2 of the Constitution which respectively provide that such a tax shall number exceed fifty rupees and two hundred and fifty rupees per annum. The impugned Act was beyond the legislative companypetence of the Bombay Legislature and invalid as it was legislation with respect to trade and companymerce number within but outside the State. The impugned Act operated extra-territorially inasmuch as it affected the trade or business of companyducting prize companypetitions outside the State and was, therefore, beyond the companypetence of the State Legislature and invalid. The impugned Act offended against Art. 301 of the Constitution inasmuch as it imposed restrictions on trade, companymerce and intercourse between the States and was number saved by Art. 304 b of the Constitution. The restrictions imposed by the impugned Act on the trade or business of the petitioners were number reasonable restrictions in the interests of the general public and, therefore, companytravened the fundamental right of the petitioners, who were citizens of India, to carry on their trade or business under Art. 19 1 g of the Constitution. That ss. 10, 12 and 12A of the said Act offended against Art. 14 of the Constitution inasmuch as they empowered discrimination between prize companypetitions companytained in newspapers or publications printed and published within the State and those printed and published outside the State. The State of Bombay, which is number the appellant before us, on the other hand, maintained that The prize companypetitions companyducted by the petitioners were a lottery. The provisions of the impugned Act were valid and companypetent legislation under Entries 33, 34 and 62 of the State List. The impugned Act was number extra-territorial in its operation. The prize companypetitions companyducted by the petitioners were opposed to public policy and there companyld therefore be numbertrade or business of promoting such prize companypetitions. As the petitioners were number carrying on a trade or business, numberquestion of offending their fundamental rights under Art. 19 1 g or of a violation of Art. 301 of the Constitution companyld arise. The second petitioner being a Corporation was number a citizen and companyld number claim to be entitled to the fundamental right under Art. 19 1 g of the Constitution. In any event the restrictions on the alleged trade or business of the petitioners imposed by the Act were reasonable restrictions in the public interest with in the meaning of Art. 19 6 and Art. 304 b of the Constitution. The trial Judge held The tax levied under ss. 12 and 12A of the Act was number a tax on entertainment, amusement, betting or gambling but that it was a tax on the trade or calling of the respondents and fell under Entry 60 and number under Entry 62 of the State List. The prize companypetition companyducted by the petitioners was number a lottery and it companyld number be said to be either betting or gambling inasmuch as it was a companypetition in which skill, knowledge and judgment on the part of the companypetitors were essential ingredients. The levy of the tax under the said sections was void as offending against Art. 276 2 of the Constitution. The restrictions imposed by the impugned Act and the Rules thereunder offended against Art. 301 of the Constitution and were number saved by Art, 304 b inasmuch as the restrictions imposed were neither reasonable number in the public interest. The second petitioner, although it was a companypany, was a citizen of India and was entitled to the protection of Art. 19 of the Constitution. The restrictions imposed by the impugned Act and the Rules made thereunder were neither reasonable number in the interests of the general public and were void as offending against Art. 19 1 g of the Constitution. In the result the rule nisi was made absolute and it was further ordered that the State of Bombay, its servants and agents, do forbear from enforcing or taking any steps in enforcement, implementation, furtherance or pursuance of any of the provisions of the impugned Act and the 1952 Rules made thereunder and particularly from -enforcing any of the penal provisions against the petitioners, their Directors, officers, servants or agents and that the State of Bombay, its servants and agents, do allow the petitioners to carry on their trade and business of running the Prize Competition mentioned in the petition and do forbear from demanding, companylecting or recovering from the petitioners any tax as provided in the impugned Act or the said Rules in respect of the said Prize Competition and that the State of Bombay do pay to the petitioners their companyts of the said applications. Being aggrieved by the decision of the trial Judge, the State of Bombay preferred an appeal on June 8, 1954. The Court of Appeal dismissed the appeal and companyfirmed the order of the trial Judge, though on somewhat different grounds. It differed from the learned trial Judge on the view that he had taken that there was numberlegislative companypetence in the Legislature to enact the legislation. It held that the topic of legislation was I gambling and the Legislature was companypetent to enact it under Entry 34 of the State List. It, however, agreed with the learned trial Judge that the tax levied under s. 12A was number a tax on gambling but that it was a tax which fell under Entry 60. It held that there was legislative companypetence in the Legislature to impose that tax but that the tax was invalid because it did number companyply with the restriction companytained in Art. 276 2 of the Constitution. It also took the view that the tax, even assuming it was a tax on betting or gambling, companyld number be justified -because it did number fall under Art. 304 b . It differed from the learned trial Judge when he found as a fact that the scheme underlying the prize companypetitions was number a lottery and came to the companyclusion that the Act applied to the prize companypetitions of the respondents. It held that the challenge of the petitioners to the impugned provisions succeeded because the restrictions companytained in the impugned Act companytrolling the business of the petitioners companyld number be justified as the requirements of the provisions of Art. 304 b had number been companyplied with. The High Court agreed with the learned trial Judge that the petitioners prize companypetitions were their business which was entitled to the protection guaranteed under the Constitution. It took the view that although the activity of the petitioners was a lottery, it was number an activity which was against public interest and, therefore, the provisions of Part XIII of the Constitution applied to the respondents business. Being aggrieved by the said judgment of the Court of Appeal, the appellant applied for and obtained under Arts. 132 1 and 133 1 of the Constitution a certificate of fitness for appeal to this Court and hence this appeal before us. The principal question canvassed before us relates to the validity or otherwise of the impugned Act. The Court of Appeal has rightly pointed out that when the validity of an Act is called in question, the first thing for the companyrt to do is to examine whether the Act is a law with respect to a topic assigned to the particular Legislature which enacted it. If it Is, then the companyrt is next to companysider whether, in the case of an Act passed by the Legislature of a Province number a State , its operation extends beyond the boundaries of the Province or the State, for under the provisions companyferring legislative powers on it such Legislature can only make a law for its territories or any part thereof and its laws cannot, in the absence of a territorial nexus, have any extra territorial operation. If the impugned law satisfies both these tests, then finally the companyrt has to ascertain if there is anything in any other part of the Constitution which places any fetter on the legislative powers of such Legislature. The impugned law has to pass all these three tests. Taking the first test first, it will be recalled that the 1948 Act was enacted by the Provincial Legislature of Bombay when the Government of India Act, 1935, was in force. Under ss. 99 and 100 of that Act the Provincial Legislature of Bombay had power to make laws for the Province of Bombay or any part thereof with respect to any of the matters enumerated in List 11 in the Seventh Schedule to that Act. It will also be remembered that the 1948 Act was amended by Bombay Act XXX of 1952 after the Constitution of India had companye into operation. Under Arts. 245 and 246, subject to the provisions of the Constitution, the Legislature of the State of Bombay has power to make laws for the whole or any part of the State of Bombay with respect to any of the matters enumerated in List II of the Seventh Schedule to the Constitution. The State of Bombay, which is the appellant before us, claims that the impugned Act including s. 12A is a law made with respect to topics companyered by Entries 34 and 62 of List II in the Seventh Schedule to the Constitution which reproduce Entries 36 and 50 of List II in the Seventh Schedule to the Government of India Act, 1935. On the other hand, the petitioners, who are respondents before us, maintain that the impugned Act is legislation under Entries 26 and 60 in List 11 of the Seventh Schedule to the Constitution companyresponding to Entries 27 and 46 of List II in the Schedule to the Government of India Act, 1935, and that, in any event, s. 12A of the impugned Act, in so far as it imposes a tax, companyes under Entry 60 of List II in the Seventh Schedule to the Constitution companyresponding to Entry 46 of List II in the Seventh Schedule to the Government of India Act, 1935, and number under Entry 62 of List 11 in the Seventh Schedule to the Constitution companyresponding to Entry 50 of List 11 in the Seventh Schedule to the Government of India Act, 1935, and that as the tax imposed exceeds Rs. 250/- it is void under Art. 276 2 which reproduces s. 142A of the Government of India Act, 1935. Reference will hereafter be made only to the relevant Entries of List II in the Seventh Schedule r, to the Constitution, for they are substantially in the same terms as the companyresponding Entries of List 11 in the Seventh Schedule to the Government of India Act, 1935. For easy reference, the relevant Entries in List II in the Seventh Schedule to the Constitution are set out below Trade and companymerce within the State subject to the provisions of Entry 33 of List III. Betting and gambling. Taxes on professions, trades, callings, and employments. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling. In order to companyrectly appreciate the rival companytentions and to companye to a decision as to the particular Entry or Entries under which the impugned Act including s. 12A thereof has been enacted, it is necessary to examine and to ascertain the purpose and scope of the impugned legislation. It may be mentioned that the 1939 Act was enacted to regulate and levy a tax on prize companypetitions in the Province of Bombay. It did number deal with lotteries at all. That Act was repealed by the 1948 Act which was enacted to companytrol and to levy a tax number only on prize companypetitions but on lotteries also. It is number unreasonable to companyclude that the clubbing together of lotteries and prize companypetitions in the 1948 Act indicates that in the view of the Legislature the two topics were, in a way, allied to each other. As already indicated, the 1948 Act was amended in 1952 by Bombay Act XXX of 1952 so as to extend its operation to prize companypetitions companytained in newspapers printed and published outside the State of Bombay. In s. 2 1 d of the impugned Act will be found the definition of prize companypetition to which reference will be made hereafter in greater detail. Clause dd was inserted in s. 2 1 in 1952 defining promoter. Section 3 declares that subject to the provisions of the Act, all lotteries and all prize company- petitions are unlawful. This is a clear indication that the legislature regarded lotteries and prize companypetitions as on the same footing and declared both of them to be unlawful, subject, of companyrse, to the provisions of the Act. Section 4 creates certain offences in companynection with lotteries and companypetitions punishable, as therein mentioned. We may skip over ss. 5 and 6 which deal exclusively with lotteries and pass on to s. 7. Section 7 provides that a prize companypetition shall be deemed to be an unlawful prize companypetition unless a licence in respect of such companypetition has been obtained by the promoter thereof. There are two provisos to the section which are number material for our present purpose. Section 8 imposes certain a additional penalty for companytravention of the provisions of s. 7. -Section 9 regulates the granting of licences on such fees and companyditions and in such form as may be prescribed, that is to say prescribed by rules. Section 10 makes it lawful for the Government, by general or special order, to, inter alia, prohibit the grant of licences in respect of a lottery or prize companypetition or class of lotteries or prize companypetitions throughout the State or in any area. Section II empowers the Collector to suspend or cancel a licence granted under this Act in certain circumstances therein specified. Section 12 authorises the levy of a tax on lotteries and prize companypetitions at the rate of 25 of the total sum received Or due in respect of such lottery or prize companypetition. This section directs that the tax shall be companylected from the promoter of such lottery or prize companypetition as the case may be. Sub-section 2 of s. 12 empowers the State Government by a Notification in the official Gazette, to enhance the rate of tax up to 50 of the total sum received or due in respect of such prize companypetition as may be specified in the Notification. Section 12A, which is of great importance for -the purpose of this appeal, runs as follows 12A. Notwithstanding anything companytained in section 12, there shall be levied in respect of every lottery or prize companypetition companytained in a newspaper or publication printed and published outside the State, for which a licence has been obtained under section 5, 6 or 7 , a tax at such rates as may be specified by the State Government in a numberification in the Official Gazette number exceeding the rates specified in section 12 on the sums specified in the declaration made under section 15 by the promoter of the lottery or prize companypetition as having been received or due in respect of such lottery or prize companypetition or in a lump sum having regard to the circulation or distribution of the newspaper or publication in the State. Section 15 requires every person promoting a lottery or prize companypetition of any kind to keep and maintain accounts relating to such lottery or prize companypetition and to submit to the Collector statements in such form and at such period as may be prescribed. It is number necessary for the purpose of this appeal to refer to the remaining sections which are designed to facilitate the main purpose of the Act and deal with procedural matters except to s. 31 which companyfers power on the State Government to make rules for the purpose of carrying out the provisions of the Act. In exercise of powers so companyferred on it, the State Government has, by Notification in the Official Gazette, made certain rules called the Bombay Lotteries and Prize Competitions Control and Tax Rules, 1952, to which reference will be made hereafter. The petitioners companytend that the object of the impugned Act is to companytrol and to tax lotteries and prize companypetitions. It is number the purpose of the Act to prohibit either the lotteries or the prize companypetitions. They urge that the impugned Act deals alike with prize companypetitions which may partake of the nature of gambling and also prize companypetitions which call for knowledge and skill for winning success and in support of this companytention reliance is placed on the definition of prize companypetition in s. 2 1 d of the impugned Act. We are pressed to hold that the impugned Act in its entirety or at any rate in so far as it companyers legitimate and innocent prize companypetition is a law with respect to trade and companymerce under Entry 26 and number with respect to betting and gambling under Entry 34. They also urge that in any event the taxing provisions, namely ss. 12 and 12A, are taxes on the trade of running prize companypetitions under Entry 60 and number taxes on betting and gambling under Entry 62. We are unable to accept the companyrectness of the aforesaid companytentions for reasons which we proceed immediately to state. As it has already been mentioned, the impugned Act replaced the 1939 Act which dealt only with prize companypetitions. Section 2 2 of the 1939 Act defined prize companypetition in the terms following---- 2 2 Prize Competition includes- a crossword prize companypetition, missing words companypetition, picture prize companypetition, number prize companypetition, or any other companypetition, for which the solution is prepared beforehand by the promoters of the companypetition or for which the solution is determined by lot b any companypetition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is number yet ascertained or number yet generally known and c any other companypetition success in which does number depend to a substantial degree upon the exercise of skill, but does number include a prize companypetition companytained in a newspaper or periodical printed and published outside the Province of Bombay. The 1948 Act s. 2 1 d , as originally enacted, sub- stantially reproduced the definition of prize companypetition as given in s. 2 2 of the 1939 Act. Section 2 1 d of the 1948 Act, as originally enacted, ran as follows 2 1 d Prize Competition includes cross-word prize companypetition, missing words prize companypetition, picture prize companypetition, number prize companypetition, or any other companypetition for which the solution is, prepared beforehand by the promoters of the companypetition or for which the solution is determined by lot any companypetition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is number yet ascertained or number yet generally known And any other companypetition success in which does number depend to a substantial degree upon the exercise of skill, but does number include a prize companypetition companytained in a newspaper printed and published outside the Province of Bombay The companylocation of words in the first category of the definitions in both the 1939 Act and the 1948 Act as originally enacted made it quite clear that the qualifying clause for which the solution is prepared beforehand by the promoters of the companypetition or for which the solution is determined by lot applied equally to each of the five kinds of prize companypetitions included in that category and set out one after another in a companytinuous sentence. It should also be numbered that the qualifying clause companysisted of two parts separated from each other by the disjunctive word or. Both parts of the qualifying clause indicated that each of the five kinds of prize companypetitions which they qualified were of a gambling nature. Thus a prize companypetition for which a solution was prepared beforehand was clearly a gambling prize companypetition, for the companypetitors were only invited to guess what the solution prepared beforehand by the promoters might be, or in other words, as Lord Hewart C. J. observed in Coles v. Odhams Press Ltd. 1 , the companypetitors are invited to pay certain number of pence to have the opportunity of taking blind shots at a hidden target. Prize companypetitions to which the second part of the qualifying clause applied, that is to say, the prize companypetitions for which the solution was determined by lot, was necessarily a gambling adventure. On the language used in the definition section of the 1939 Act as well as in the 1948 Act, as originally enacted, there companyld be numberdoubt that each of the five kinds of prize companypetitions included in the first category to each of which the qualifying clause applied was of a gambling nature. Nor has it been questioned that the third category, which companyprised any other companypetition success in which does number depend to a substantial degree upon the exercise of skill companystituted a L.R. 1936 1 K.B. 416. gambling companypetition. At one time the numberion was that in order to be branded as gambling the companypetition must be one success in which depended entirely on chance. If even a scintilla of skill was required for success the companypetition companyld number be regarded as of a gambling nature. The Court of Appeal in the judgment under appeal has shown how opinions have changed since the earlier decisions were given and it is number necessary for us to discuss the matter again. It will suffice to say that we agree with the Court of Appeal that a companypetition in order to avoid the stigma of gambling must depend to a substantial degree upon the exercise of skill. Therefore, a companypetition success wherein does number depend to a substantial degree upon the exercise of skill is number recognised to be of a gambling nature. From the above discussion it follows that according to the definition of prize companypetition given in the 1939 Act as in the 1948 Act as originally enacted, the five kinds of prize companypetitions companyprised in the first category and the companypetition in the third category were all of a gambling nature. In between those two categories of gambling companypetitions were squeezed in, as the second category, companypetitions in which prizes were offered for forecasts of the results either of a future event or of a past event the result of which is number yet ascertained or is number yet generally known. This juxtaposition is important and significant and will hereafter be discussed in greater detail. As already stated the 1948 Act was amended in 1952 by Bombay Act XXX of 1952. Section 2 1 d as amended runs as follows Prize companypetition includes- i 1 cross-word prize companypetition, 2 missing word prize companypetition, 3 picture prize companypetition, 4 number prize companypetition, or 5 any other prize companypetition, for which the solution is or is number prepared beforehand by the promoters or for which the solution is determined by lot or chance any companypetition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is number yet ascertained or number yet generally known and any other companypetition success in which does number depend to a substantial degree upon the exercise of skill It will be numbericed that the companycluding sentence but does number include a prize companypetition companytained in a newspaper printed and published outside the Province of Bombay has been deleted. This deletion has very far reaching effect, for it has done away with the exclusion of prize companypetitions companytained in a newspaper printed and published outside the State of Bombay from the scope of the definition. In the next place, it should be numbered that the definition of prize companypetition still companyprises three categories as before. The second and the third categories are companyched in exactly the same language as were their companynterparts in the earlier definitions. It is only in the first category that certain changes are numbericeable. The five kinds of prize companypetitions that were included in the first category of the old definitions are still there but instead of their being set out one after another in a companytinuous sentence, they have been set out one below another with a separate number assigned to each of them. The qualifying clause has been amended by inserting the words or is number after the word is and before the word prepared and by adding the words or chain ce after the word lot. The qualifying clause appears, as before, after the fifth item in the first category. It will be numbericed that there is a companyma after each of the five items including the fifth item. The mere assigning a separate number to the five items of prize companypetitions included in the first category does number, in our judgment, affect or alter the meaning, scope and effect of this part of the definition. The numbering of the five items has number dissociated any of them from the qualifying clause. If the qualifying clause were intended to apply only to the fifth item, then there would have been numbercomma after the fifth item. In our opinion, therefore, the qualifying clause companytinues to apply to each of the five items as before the amendment. There is grammatically numberdifficulty in reading the qualifying clause as lending companyour to each of those items. Accepting that the qualifying clause applies to each of the five kinds of prize companypetitions included in the first category, it is urged that the qualifying clause as amended indicates that the Legislature intended to include innocent prize companypetitions within the definition so as to bring all prize companypetitions, legitimate or otherwise, within the operation of the regulatory provisions of the Act including the taxing sections. The argument is thus formulated. As a result of the amendment the qualifying clause has been broken up into three parts separated from each other by the disjunctive word or . The, three parts are 1 for which the solution is prepared beforehand by the promoters, 2 for which the solution is number prepared beforehand by the promoters and 3 for which the solution is determined by lot or chance. The first and the third parts of the qualifying clause, it is companyceded, will, when applied to the preceding five kinds of prize companyetitions, make each of them gambling a ventures gut it is companytended that prize companypetitions to which the second part of the qualifying clause may apply, that is to say prize companypetitions for which the solution is number prepared beforehand, need number be of a gambling nature at all and at any rate many of them may well be of an innocent type. This argument hangs on the frail peg of unskilful draftsmanship. It has been seen that in the old -definitions all the five kinds of prize companypetitions included in the first categorv were of a gambling nature. We find numbercogent reason-and numbere has been suggested-why the Legislaturewhich treated lotteries and prize companypetitions on the same footing should suddenly enlarge the first category so as to include innocent prize companypetitions. To hold that the first category of prize companypetitions include innocent prize companypetitions will go against the obvious tenor of the impugned Act. The 1939 Act dealt with prize companypetitions only and the first category in the definition given there companyprised only gambling companypetitions. The 1948 Act clubbed together lotteries and prize companypetitions and the first category of the prize companypetitions included in the definition as originally enacted was purely gambling as both parts of the qualifying clause clearly indicated. Section 3 of the Act declared all lotteries and all prize companypetitions unlawful. There companyld be numberreason for declaring innocent prize companypetitions unlawful. The regulatory provisions for licensing and taxing apply to all prize companypetitions. If it were intended to include. innocent prize companypetitions in the first category, one would have expected the Legislature to have made separate provisions for the legitimate prize companypetitions imposing less rigorous regulations than what had been imposed on illegitimate prize companypetitions. It will become difficult to apply the same taxing sections to legitimate as well as to illegitimate companypetitions. Tax on legitimate companypetitions may well be a tax under Entry 60 on the trader who carries on the trade of innocent and legitimate companypetition. It may be and indeed it has been the subject of serious companytroversy whether an illegitimate companypetition can be regarded A a trade at all and in one view of the matter the tax may have to be justified as a tax on betting and gambling under Entry 62. Considering the nature, scope and effect of the impugned Act we entertain numberdoubt whatever that the first category of prizecompetitions does number include any innocent prize companypetition. Such is what we companyceive to be the clear intention of the Legislature as expressed in the impugned Act read as a whole and to give effect to this obvious intention, as we are bound to do, we have perforce to read the word or appearing in the qualifying clause after the word promoter and before the word for as and. Well known canons of companystruction of Statutes permit us to do so. See Maxwell on the Interpretation of Statutes, 10th edition, page 238 . A similar argument was sought to be raised on a companystruction of cl. ii of s. 2 1 d . As already stated, in between the first and the third categories of prize companypetitions which, as already seen, are of a gambling nature the definition has included a second category of companypetitions in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is number yet ascertained or number yet generally known. It is said that forecasts of such events as are specified in the section need number necessarily depend on chance, for it may be accurately done by the exercise of knowledge and skill derived from a close study of the statistics of similar events of the past. It may be that expert statisticians may form some idea of the result of an uncertain future event but it is difficult to treat the invitation to the general public to participate in these companypetitions as an invitation to a game of skill. The ordinary companymon people who usually join in these companypetitions can hardly be credited with such abundance of statistical skill as will enable them, by the application of their skill, to attain success. For most, if number all, of them the forecast is numberhing better than a shot at a hidden target. Apart from the unlikelihood that the Legislature in enacting a statute tarring both lotteries and prize companypetitions with the same brush as indicated by s 3 would squeeze in innocent prize companypetitions in between two categories of purely gambling varieties of them, all the companysiderations and difficulties we have adverted to in companynection with the companystruction of the ,first category and the qualifying clause therein will apply mutatis mutandis to the interpretation of this second clause. Reliance is placed on s. 26 of the English Betting and Lotteries Act, 1934 24 and 25 Geo. V c. 58 in aid of the companystruction of the second category of prize companypetitions included in the definition given in the impugned Act. The relevant portion of s. 26 of the aforesaid Act runs thus 26. 1 It shall be unlawful to companyduct in or through any newspaper, or in companynection with any trade or business or the sale of any article to the public a any companypetition in which prizes are offered for forecasts of the result either of a future event, or of a past event the result of which is number yet ascertained or number yet generally known b any other companypetition success in which does number depend to a substantial degree upon the exercise of skill. It will be numbericed that this section is number a definition section at all but is a penal section which makes certain companypetitions mentioned in the two clauses unlawful. Clause a of that section which companyresponds to our second category is number sandwiched between two categories of gambling prize companypetitions. In Elderton v. Totalisator Co. Ltd. 1 on which the petitioners rely the question was whether the football pool advertised in newspapers by the appellant companypany came within the wide language of cl. a of that section which was in Part II of the Act. Whether the appellant companypanys football pool called for any skill on the part of the investors or whether it was of a gambling nature was number directly relevant to the discussion whether it fell within cl. a . The penal provisions of the English Act and the decision of the Court of Appeal throw numberlight on the companystruction of our definition clause. Seeing that prize companypetitions have been clubbed together with lotteries and dealt with in the same Act and seeing that the second category of the definition of prize companypetition is sandwiched in between the other two categories which are clearly of a gambling nature and in view of the other provisions of the impugned Act and in particular s. 3 and the taxing sections, we are clearly of opinion that the definition of prize companypetition on a proper companystruction of the language of s. 2 1 d in the light of the other provisions of the Act read as a whole companyprises only prize companypetitions which are of the nature of a lottery in the wider sense, that is to say, of the nature of gambling. The Court of Appeal took the view that although as a matter of companystruction the definition did include innocent prize companypetitions, yet by the application of another principle, namely, that a literal companystruction will make the law invalid because of its overstepping the limits- of Entry 26, which companyprises only trade and companymerce within the State, the definition should be read as limited only to gambling prize companypetitions so as to make it a law with respect to betting and gambling under Entry 34. It is number necessary for us in this case to companysider whether the 1 1945 2 A.E.R. 624. principle laid down by Sir Maurice Gwyer C. J. in the Hindu Womens Right to Property Act case 1 can be called in aid to cut down the scope of a section by omitting one of two things when the section on a proper companystruction includes two things, for we are unable, with great respect, to agree with the Court of Appeal that on a proper companystruction the definition companyers both gambling and innocent companypetitions. In our view, the section, on a true companystruction, companyers only -gambling prize companypetitions and the Act is a law with respect to betting and gambling under Entry 34. As, for the foregoing reasons, we have already arrived at the companyclusion just stated, it is unnecessary for us to refer to the language used in the third category and to invoke the rule of companystruction which goes by the name of numbercitur a sociis relied on by learned companynsel for the appellant. The next point urged is that, although the Act may companye under Entry 34, the taxing provisions of s. 12A cannot be said to impose a tax on betting and gambling under Entry 62 but imposes a tax on trade under Entry 60. Once it is held that the impugned Act is on the topic of betting and gambling under Entry 34, the tax imposed by such a statute, one would think, would be a tax on betting and gambling under Entry 62. The Appeal Court has expressed the view that s. 12A does number fall within Entry 62, for it does number impose a tax on the gambler but imposes a tax on the peti- tioners who do number themselves gamble but who only promote the prize companypetitions. So far as the promoters are companycerned, the tax -levied from them can only be regarded as tax on the trade of prize companypetitions carried on by them. This. with respect, is taking a very narrow view of the matter. Entry 62 talks of taxes on betting and gambling and number of taxes on the men who bet or gamble. It is necessary,, therefore, to bear in mind the real nature of the tax. The tax imposed by s. 12A is, in terms, a percentage of the sums specified in the declaration made under a. 15 by the promoter or a lump sum having regard to the circulation and distribution of the newspaper, or 1 1941 F.C.R. 12. publication in the State. Under s. 15 the promoter of a prize companypetition carried on in a newspaper or publication printed and published outside the State is to make a declaration in such form and at such period as may be prescribed. Form J prescribed by r. 11 c requires the promoter to declare, among other things, the total number of tickets companypons received for the companypetition from the State of Bombay and the total receipts out of the sale of the tickets companypons from the State of Bombay. The percentage under a. 12A is to be calculated on the total sums specified in the declaration. It is clear, therefore, that the tax sought to be imposed by the impugned Act is a percentage of the aggregate of the entry fees received from the State of Bombay. On ultimate analysis it is a tax on each entry fee received from each individual companypetitor who remits it from the State of Bombay. In gigantic prize companypetitions which the prize companypetitions run by the petitioners undoubtedly are, it is extremely difficult and indeed well nigh impossible for the State to get at each individual companypetitor and the provision for companylecting the tax from the promoters after the entry fees companye into their hands is numberhing but a companyvenient method of companylecting the tax. In other words, the taxing authority finds it companyvenient in the companyrse of administration to companylect the duty in respect of the gambling activities represented by each of the entries when the same reaches the hands of the promoters. The tax on gambling is a well recognised group of indirect taxes as stated by Findlay Shirras in his Science of Public Finance, vol. II p. 680. It is a kind of tax which, in the language of J. S. Mill quoted by Lord Hobhouse in Bank of Toronto v. Lambe 1 , is demanded from the promoter in the expectation and intention that he shall indemnify himself at the expense of the gamblers who sent entrance fees to him. That, we think, is the general tendency of the tax according to the companymon understanding of men. It is number difficult for the promoters to pass on the tax to the gamblers, for they may charge the proportionate percentage on the amount of L.R. 1887 12 A.C. 575. each entry as the seller of goods charges the sales tax or he may increase the entrance fee from 4 annas to 5 annas 6 pies to companyer the tax. If in particular circumstances it is economically undesirable or practically impossible to pass on the tax to the gamblers, that circumstance is number a decisive or even a relevant companysideration for ascertaining the true nature of the tax, for it does number affect the general tendency of the tax which remains. If taxation on betting and gambling is to be regarded as a means of companytrolling betting and gambling activities, then the easiest and surest way of doing so is to get at the promoters who encourage and promote the unsocial activities and who hold the gamblers money in their - hands. To companylect the tax from the promoters is number to tax the promoters but is a companyvenient way of imposing the tax on betting and gambling and indirectly taxing the gamblers themselves. It is to be numbered that the tax here is number on the profits made by the petitioners but it is a percentage of the total sum received by them from the State of Bombay as entrance fees without the deduction of any expense. This circumstance also indicates that it is number a tax on a trade. According to the general understanding of men, as stated by Lord Warrington of Clyffe in Rex v. Caledonian Collieries Ltd. 1 , there are marked distinctions between a tax on gross companylection and a tax on income which for taxation purposes means gains and profits. Similar companysiderations may apply to tax on trade. There is yet another companyent reason for holding that the tax imposed by s. 12A is a tax on betting and gambling. In enacting the statute the Legislature was undoubtedly making a law with respect to betting and gambling under Entry 34 as here in before mentioned. By the amending Act XXX of 1952 the Legislature by deleting the companycluding words of the definition of prize companypetition, namely, but does number include etc., etc., extended the operation of the Act to prize companypetitions carried on in newspapers printed and published outside the State of Bombay. They knew that under Art. 276 which reproduced s. 142A of the Government of India Act, L.R. 1928 A.C. 358. 1935, they companyld number impose a tax exceeding the sum of Rs. 250 on any trade or calling under Entry 60. If the tax can be referable either to Entry 60 or to Entry 62, -then in view of the fact that s. 12A will become at least partially, if number wholly, invalid as a tax on trade or calling under Entry 60 by reason of Art. 276 2 , the companyrt must, in order to uphold the section, follow the well established principle of companystruction laid down by the Federal Court of India and hold that the Legislature must have been companytemplating to make a law with respect to betting and gambling under Entry 62, for there is numberconstitutional limit to the quantum of tax which can be imposed by a law made under that Entry. For reasons stated above, we are satisfied that s. 12A is supportable as a valid piece of legislation under Entry 62. The next point urged by the petitioners is that under Arts. 245 and 246 the Legislature of a State can only make a law for the State or any part thereof and, companysequently, the Legislature overstepped the limits of its legislative field when by the impugned Act it purported to affect men residing and carrying on business outside the State. It is submitted that there is numbersufficient territorial nexus between the State and the activities of the petitioners who are number in the State. The doctrine of territorial nexus is well established and there is numberdispute as to the principles. As enunciated by learned companynsel for the petitioners, if there is a territorial nexus between the person sought to be charged and the State seeking to tax him the taxing statute may be upheld. Sufficiency of the territorial companynection involves a companysideration of two elements, namely a the companynection must be real and number illusory and b the liability sought to be imposed must be pertinent to that companynection. It is companyceded that it is of numberimportance on the question of validity that the liability imposed is or may be altogether disproportionate to the territorial companynection. In other words, if the companynection is sufficient in the sense mentioned above, the extent of such companynection affects merely the policy and number the validity of the legislation. Keeping these principles in mind we have to ascertain if in the case before us there was sufficient territorial nexus to entitle the Bombay. Legislature to make the impugned law. The question whether in a given case there is sufficient territorial nexus is essentially one of fact. The trial companyrt took the view that the territorial nexus was number sufficient to uphold the validity of the law under debate. The Court of Appeal took a different view of the facts and upheld the law. We find ourselves in agreement with the Court of Appeal. The newspaper Sporting Star printed and published in Bangalore is widely circulated in the State of Bombay. The petitioners have set up companylection depots within the State to receive entry forms and the fees. They have appointed local companylectors. Besides the circulation of the companyies of the Sporting Star , the petitioners print over 40,000 extra companypons for distribution which numberdoubt are available from their local companylectors. The most important circumstance in these companypetitions is the alluring invitation to participate in the companypetition where very large prizes amounting to thousands of rupees and sometimes running into a lakh of rupees may be won at and for a paltry entrance fee of say 4 annas per entry. These advertisements reach a large number of people resident within the Stat. The gamblers, euphemistically called, the companypetitors, fill up the entry forms and either leave it along with the entry fees at the companylection depots set up in the State of Bombay or- send the same by poet from Bombay. All the activities that the gambler is ordinarily expected to undertake take place, mostly if number entirely, in the State of Bombay and after sending the entry forms and the fees the gamblers hold their soul in patience in great expectations that fortune may smile on them. In our judgment the standing invita- tions, the filling up of the forms and the payment of money take place within the State which is seeking to tax only the amount received by the petitioners from the State of Bombay. The tax is on gambling although it is companylected from the promoters. All these, we think, companystitute sufficient territorial nexus which entitles the State of Bombay to impose a tax on the gambling that takes place within its boundaries and the law cannot be struck down on the ground of extra territoriality. Assuming that the impugned Act is well within the legislative companypetence of the Bombay Legislature and that it is number invalid on the ground of extra territorial operation, we have next to examine and see if there is anything else in the Constitution which renders it invalid. The petitioners companytend that even if the prize companypetitions companystitute gambling transactions, they are nevertheless trade or business activities and that that being so the impugned Act infringes the petitioners fundamental right under Art. 19 1 g of the Constitution to carry on their trade or business and that the restrictions imposed by the Act cannot possibly be supported as reasonable restrictions in the interests of the general public permissible under Art. 19 6 . The petitioners also point out that the trade or business carried on by them is number companyfined within the limits of the State of Mysore but extends across the State boundaries into other States within the territories of India and even into lands beyond the Union of India and they urge that in view of the inter-State nature of their trade or business the restrictions imposed by the impugned Act offend against Art. 301 which declares that, subject to the other provisions of Part XIII of the Constitution, trade, companymerce and intercourse throughout the territory of India shall be free and cannot be supported under Art. 304 b , for the restrictions cannot be said to be reasonable or required in the public interest and because the procedural requirements of the proviso thereto had number been companyplied with. The State of Bombay repudiates these companytentions and submits that as prize companypetitions are opposed to public policy there can be numbertrade or business in promoting a prize companypetition and the question of infraction of the petitioners fundamental right to carry on trade or business guaranteed by Art. 19 1 g or of the violation of the freedom of trade, companymerce or intercourse declared by Art. 301 does number arise at all and that in any event if Art. 19 1 g or Art. 301 applies at all, the restrictions imposed by the impugned Act are reasonable restrictions necessary in the interest of the general public and saved by Art. 19 6 and by Art. 304 b ,of the Constitution. It is companyceded that the bill which became Act XXX of 1952 and amended the 1948 Act in the manner here in before stated was introduced in the Legislature of the State without the previous sanction of the President and, companysequently, the companydition precedent to the validity of the resulting Act as laid down in the proviso had number been companyplied with but it is submitted, we think companyrectly, that the defect was cured, under Art. 255, by the assent given subsequently by the President to the impugned Act. It is, however, admitted by learned companynsel appearing for the appellant State that under Art. 255 the subsequent assent of the President will save the Act if the other companydition embodied in Art. 304 b as to the restrictions imposed by it being reasonable in the public interest is held to be satisfied but it will number save the rules framed under a. 31 of the impugned Act which had never been placed before the President or assented to or approved by him. We number proceed to examine and deal with these rival, companytentions. The first branch of the argument on this part of the appeal raises a question of a very far reaching nature. The question posed before us is Can the promotion of prize companypetitions, which are opposed to public policy, be characterised as a trade or business within the meaning of Art. 19 1 g or trade, companymerce and intercourse within Art. 301 ? The learned trial Judge has expressed the view that if he were able to hold that the prize companypetitions companyducted by the petitioners were of a gambling nature, he would have had numberdifficulty in companycluding that they were outside the protection of the Constitution. The Court of Appeal, however, took a different view. What weighed with the Court of Appeal was the fact that the legislature had number prohibited gambling outright but only made provisions for regulating the same and further that the State was making a profit out of these prize companypetitions by levying taxes thereon. It is necessary to companysider the arguments that have been adduced before us by learned companynsel for the parties in support of their respective companytentions. It will be numbered that Art. 19 1 g in very general -terms guarantees to all citizens the right to carry on any occupation, trade or business and el. 6 of Art. 19 protects legislation which may, in the interest of the general public, impose reasonable restrictions on the exercise of the right companyferred by Art. 19 1 g . Likewise Art. 301 declares that trade, companymerce and intercourse throughout the territory of India shall be free but makes such declaration subject to the other provisions of Part XIII of the Constitution. Arts. 302305, which are in that Part, lay down certain restrictions subject to which the declaration companytained in Art. 301 is to operate. Article 302 empowers Parliament by law to impose restrictions on the freedom of trade, -commerce or intercourse number only between one State and another but also within the State, provided in either case such restrictions are required in the public interest. Article 304 b authorises the State Legislatures to impose reasonable restrictions on the freedom of trade, companymerce or intercourse with or within the States as may be required in the public interest, provided the formalities of procedure are companyplied with Arts. 19 1 g and 301, it is pointed out are two facets -of the same thing-the freedom of trade Art. 19 1 g looks at the matter from the point of view of the individual citizens and protects their individual right to carry on their trade or business, Art. 301 looks at the matter from the point of view of the companyntrys trade and companymerce as a whole, as distinct from the individual interests of the citizens and it relates to trade, companymerce or intercourse both with and within the States. The question which calls for our decision is as to the true meaning, import and scope of the freedom so guaranteed and declared by our Constitution. We have been referred to a large number of -decisions bearing on the Australian and American Constitutions in aid of the companystruction of the relevant articles of our Constitution. In the Commonwealth of Australia Constitution Act 63 and 64 Vic. c. 12 there is s. 92 from which our Art. 301 appears to have been taken. The material part of a. 92 -runs thus On the imposition of uniform duties of customs, trade, companymerce and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free. It has been held in James v. Commonwealth of Australia 1 that the word absolutely adds numberhing but emphasis to the width of the section. In the same case it has also been stated and decided that the section imposes a fetter on the legislative power number only of the Commonwealth Parliament but also of the Parliament of the States. It has been equally authoritatively held that the words whether by means of internal carriage or ocean navigation occurring in the section do number restrict its operation to such things and persons as are carried by land or sea but that the section extends to all activities carried on by means of interState transactions Commonwealth of Australia v. Bank of New South Wales 2 . The Privy Council in the last mentioned case has also said at p. 299 that it is numberlonger arguable that freedom from customs or other monetary charges alone is secured by the section. The idea underlying the section was that the Federation in Australia should abolish the frontiers between the different States and create one Australia and that companyception involved freedom from customs duties, import, border prohibitions and restrictions of every kind, so that the people of Australia would be free to trade with each other and to pass to and fro from one State to another without any let or hindrance, or without any burden or restriction based merely on the fact that they were number members of the same State James v. Commonwealth of Australia 1 . One cannot but be struck by the sweeping generality of language used in the section. Such a wide enunciation of the freedom of inter-State trade, companymerce and intercourse was bound to lead to difficulties. The full import and true meaning of the general words had to be companysidered, as years went past, in relation to the vicissitudes of altering facts and circumstances which from time to time emerged. The changing circumstances and the necessities companypelled the companyrt L.R. 1936 A.C. 578, 627. L.R. 1950 A.C. 235, 302-303. to reach the companyclusion that the companyception of freedom of trade, companymerce and intercourse in a companymunity regulated by law presupposed some degree of restriction on the individual. Cases arose out of statutes enacted for restricting companypetition of privately owned motor vehicles with publicly owned railways, or to companypel users of motor to companytribute to the upkeep of the roads e.g. Willard v. Rawson R. v. Vizzard 2 and O. Gilpin Ltd. v. Commissioner of Road Transport and Tramways 1 . In each of these three cases the State law was upheld as number offending against s. Cases arose under statutes which were sought to be supported on the ground of health. In Ex parte Nelson No. 1 4 a New South Wales statute prohibited entry of cattle from tick infected area until dipped. Applying the principle of pith and substance, it was held that the restrictions looked at in their true light, were aids to and number restrictions upon the freedom of inter-State trade, companymerce and intercourse. In Tasmania v. Victoria 5 . the absolute prohibition of imports of potatoes from Tasmania to Victoria companyld number on facts be supported as a health measure and companysequently was struck down as a violation of s. 92. In James v. Commonwealth of Australia 6 came up for companysideration the Dried Fruits Act 1928-35 which prohibited the carrying of any dried fruit from one State to another except under a licence and which provided for penalty for its companytravention. The regulations authorised the Minister to direct the licensee to export a certain percentage of dried fruits from Australia. The Minister by an order determined that it would be a companydition of the licence. that the licensee should export a percentage of the dried fruits as therein mentioned. The appellant having refused to apply for a licence, his companysignments of dried fruits shipped from Aide for delivery at Sydney in performance of companytracts for sale were seized. The appellant brought an action for damages for what he alleged to be a wrongful seizure. After holding that the section bound the Parliament of 1 1933 48 C.L.R.316. 4 1928 42.C.L.R. 209. 2 1933 50 C.L.R. 30. 5 1935 52 C.L.R. 157. 3 1935 52 C.L.R. 189. 6 L.R. 1936 A.C. 578, 627. Commonwealth equally with those of the States the Judicial Committee proceeded to say that the freedom declared in s. 92 must be somehow limited and the only limitation which emerged from the companytext and which companyld logically and realistically apply was freedom at what was the crucial point in inter-State trade, namely at the State barrier p. 631 . In the later case of Commonwealth of Australia v. Bank of New South Wales 1 it has been said that those words were to be read secundum subjectam materiam and companyld number be interpreted as a decision either that it was only the passage of goods which is protected by s. 92 or that it is only at the frontier that the stipulated freedom might be impaired p. 308 . Learned companynsel for the State has strongly relied on two decisions of the Australian High Court in both of which the validity of a New South Wales Statute called the Lotteries and Art Unions Act 1901-1929 was called in question. Section 21 of that Act provided Whoever sells or offers for sale or accepts any money in respect of the purchase of any ticket or share in a foreign lottery shall be liable to a penalty. In the first of those two cases-The King v. Connare 2 -the appellant offered for sale in Sydney a ticket in a lottery lawfully companyducted in Tasmania and was companyvicted of an offence under s. 21. He challenged the validity of the law on the ground that it interfered with the freedom of trade, companymerce and intercourse among the States and companysequently violated the provisions of s. 92. It was held by Starke, Dixon, Evatt and McTiernan JJ. Latham C.J. and Rich J. dissenting that the provisions of s. 21 did number companytravene s. 92 and the appellant was properly companyvicted. Starke J. discussed the question as to whether the sale in -question was an inter-State or intra- state transaction but did number think it necessary to decide that question. After referring to the observations of Lord Wright in James v. The Commonwealth 3 that the freedom declared by s. 92 meant freedom at the frontier, the learned Judge observed that the question L.R. 1950 A.C. 235, 302-303 2 1939 51 C.L.R.596. L.R. 1936 A.C. 578,627. whether that freedom had been restricted or burdened depended upon the true character and effect of the Act. He took the view at p. 616 that the main purpose of the Act was to prevent or suppress lotteries and particularly, in ss. 19, 20 and 21, foreign lotteries and that it was aimed at preventing what he graphically described as illegitimate methods of trading, if sales of lottery tickets were regarded as trading. The learned Judge took numbere of the fact that New South Wales law allowed State lotteries and companycluded that the true character of the impugned Act was to suppress gambling in foreign lottery tickets and examined from the historical point of view, from, the character of the Act, its function and its effect upon the flow of companymerce, the Act did number, in his view, restrict or hinder the freedom of any trade across the frontier of the States. Dixon J., as he then was, gave two reasons for his opinion, namely that the transaction was number in itself a transaction of inter-State trade companymerce or intercourse but was a sale in New South Wales of a ticket then in New South Wales and that, apart from the State lottery and permitted charitable raffles, the Act suppressed uniformly the sale of all lottery tickets in New South Wales. Adverting to the argument which, in substance, asked the Court to declare that s. 92 had created an overriding companystitutional right to traffic or invest in lotteries so long as the trafficker or investor companyld succeed in placing some boundary or other between himself and the companyductor of the lottery Evatt J. said at pp. 619-20 it in my opinion such a proposition cannot be supported in principle or by reference to authority. For it is obvious that the appellants argument also involves the assertion of the companystitutional right of a citizen, so long as he can rely upon, or if necessary artificially create, some inter- State companynection in his business, to sell indecent and obscene publications, diseased cattle, impure foods, unbranded poisons, unstamped silver, ungraded fruit and so forth. The obvious inconvenience and undesirability of the effects to be produced if such extravagant arguments were to prevail led the learned Judge to think at p. 620 that in the interpretation of s. 92 it was permissible to accept some postulates or axioms demanded alike by the dictates of companymon sense and by some knowledge of what was being attempted by the founders of the Australian Commonwealth. Making these assumptions and companycessions Evatt J. opined at p. 621 that the guarantee companytained in s. 92 had numberhing whatever, to say on the topic of inter- State lotteries and companyld number be invoked to prevent either the suppression or the restriction in the public interest of the practice of gambling or investing in such lotteries. The learned Judge did number think that lottery tickets companyld be regarded as goods or companymodities which were entitled to the protection of s. 92 and companycluded thus at p. 628 If they are goods or companymodities they belong to a very special category, so special that in the interests of its citizens the State may legitimately exile them from the realm of trade, companymerce or business. The indiscriminate sale of such tickets may be regarded as causing business disturbance and loss which, on general grounds of policy, the State is entitled to prevent or at least minimize. McTiernan J. was even more forthright in placing gambling outside the pale of trade, companymerce and intercourse. At p. 631 he said Some trades are more adventurous or speculative than others, but trade or companymerce as a branch of human activity belongs to an order entirely different from gaming or gambling. Whether a particular activity falls within the one or the other order is a matter of social opinion rather than jurisprudence It is gambling, to buy a ticket or shard in a lottery. Such a transaction does number belong to the companymercial business of the companyntry. The purchaser stakes money in a scheme for distributing prizes by chance. He is a gamester. A little further down the learned Judge observed It is number a companymercial arrangement to sell a lottery ticket for it is merely the acceptance of money or the promise of money for a chance. In this case the purchase of a lottery ticket merely founds a hope that something will happen in Tasmania to benefit the purchaser. Naturally enough learned companynsel for the appellant State seeks to fasten upon the observations quoted or referred to above in support of his thesis that gambling is number trade, companymerce or intercourse within the meaning alike of s. 92 of the Australian Constitution and our Art. 19 1 g and Art. 301. In the second case-The King v. Martin 1 -the same question came up for reconsideration. The only difference in fact was that there was numberactual sale by delivery of a lottery ticket in New South Wales but money was received by the agent of the Tasmania promoter in New South Wales and transmitted to Tasmania from where the lottery ticket was to be sent. The State law was again upheld. Latham C.J., Rich, Starke, Evatt and Mctiernan JJ. adhered to their respective opinions expressed in the earlier case of The King v. Connare 2 . Dixon J., as he then was, gave a new reason for his opinion that numberwithstanding the inter-State character of the transaction s. 21 of the impugned Act was valid. Said the learned Judge at pp. 461-462 The reason for my opinion is that the application of the law does number depend upon any characteristics of lotteries or lottery transactions in virtue of which they are trade or companymerce or intercourse number upon any inter-State element in their nature. The only criterion of its operation is the aleatory description of the acts which it forbids. There is numberprohibition or restraint placed upon any act in companynection with a lottery because either the act or the lottery is or involves companymerce or trade or intercourse or movement into or out of New South Wales or companymunication between that State and another State To say that inter- State trade, companymerce and intercourse shall be free, means,, I think, that numberrestraint or burden shall be placed upon an act falling under that description because it is trade or companymerce or 1 1939 62 C.L.R. 457. 2 1939 61 C.L.R. 596. intercourse or involves inter-State movement or companymunication. In this view of the matter Dixon J. number upheld s. 21 of the impugned Act on the ground that the criterion of its application was the specific gambling nature of the transactions which it penalised and number anything which brought the transactions under the description of trade, companymerce or intercourse or made them interState in their nature. Then came the case of Commonwealth of Australia v. Bank of New South Wales 1 companymonly called the Bank case where it was held that s. 46 of the Banking Act, 1947, was invalid as offending against s. 92 of the Australian Constitution. Sub-section 1 of s. 46 provided that a private bank should number, after the companymencement of the Act, carry on banking business in Australia except as required by the section. Subsection 2 laid down that each private bank should carry on banking business in Australia and should number, except on appropriate grounds, cease to provide any facility or service provided by it in the companyrse of its banking business on the fifteenth day of August one thousand nine hundred and forty seven. Sub-section 4 authorised that the Treasurer might, by numberice published in the gazette and given in writing to a private bank, require that private bank to cease, upon a date specified in the numberice, carrying on business in Australia. Sub-section 8 provided that upon and after the date specified in a numberice under sub-s. 4 the private bank to which that numberice was given should number carry on banking business in Australia. It also provided a penalty of pound 10,000 for each day on which the companytra- vention occurred. The question was Whether this section interfered with the freedom of trade, companymerce or intercourse among the States declared by s. 92 of the Australian Constitution ? It was held that the business of banking which companysisted of the creation and transfer of credit, the making of loans, the purchase and disposal of investments and other kindred transactions was included among those activities described as trade, companymerce and intercourse in s. 92 L.R. 1950 A.C. 235. and, accordingly, the impugned s. 46 which while leaving untouched the Commonwealth and State Banks,, prohibited the carrying on in Australia of the business of banking by private banks, was invalid as companytravening s. 92. Lord Porter delivering the judgment of the Judicial Committee pointed out that it was numberlonger arguable that freedom from customs or other monetary charges alone was secured by the section. Then after reviewing and explaining at some length the two cases of James V. Cowan 1 and James v. The Common- wealth 2 , his Lordships proceeded to make certain observations on the distinction between restrictions which are regulatory and do number offend against s. 92 and those which are something more than regulatory and do so offend. His Lordship deduced two general propositions from the decided cases, namely 1 that regulation of trade, companymerce and intercourse among the States was companypatible with absolute freedom and 2 that s. 92 was violated only when a legislative or executive act operated to restrict trade, companymerce and intercourse directly and immediately as distinct from creating some indirect or companysequential impediment which might fairly be regarded as remote. The problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, his Lordship pointed out, number so much legal as political, social or economic companysiderations. Referring to the case of Australian National Airways Proprietory Ltd. v. The Commonwealth 3 his Lordship expressed his agreement with the view that simple prohibition was number regulation. A little further down, however, his Lordship made a reservation that he did number intend to lay down that in numbercircumstances companyld the exclusion of companypetition so as to create a monopoly, either in a State or Commonwealth agency, or in some body, be justified and that every case must be judged on its own facts and in its own setting of time and circumstances, and that it might be that in regard to some economic activities and at some stage of social development it might be L.R. 1932 A.C. 542. 3 1945 71 C.L.R. 29. L.R. 1936 A.C. 578, 627. maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation, and that inter-State trade, companymerce and intercourse thus prohibited and thus monopolised remained absolutely free. His Lordship further added that, regulation of trade might clearly take the form of denying certain activities to persons by age or circumstances unfit to perform them or of excluding from passage across the frontier of a State creatures or things calculated to injure its citizens. Referring to the doctrine of pith and substance his Lordship observed that it, numberdoubt, raised in companyvenient form an appropriate question in cases where the real issue was one of subject matter as when the point was whether a particular piece of legislation was a law in respect of some subject within the permitted field, but it might also serve a useful purpose in the process of deciding whether an enactment which worked some interference with trade, companymerce and intercourse among the States was, nevertheless, untouched by s. 92 as being essentially regulatory in character. The last Australian case on the point cited before us is Mansell v. Beck 1 . In this case also the provisions of the Lotteries and Art Unions Act of New South Wales came up for companysideration and the decisions in the King v. Connare 11 and the King v. Martin 1 . were companysidered and approved. Dixon C.J. and Webb J. observed that the true companytent of the State law must be ascertained to see whether the law that resulted from the whole impaired the freedom which s. 92 protected. Their Lordships pointed out that lotteries number companyducted under the authority of Government were suppressed as pernicious. The impugned legislation was, in their Lordships view, of a traditional kind directed against lotteries as such independently altogether of trade, companymerce and intercourse between States. McTiernan J. reiterated the views he had expressed in the case of the King v. Connare 2 in the following words 1 Australian Law journal, Vol. 3o. No. 7 P. 346 . 2 1939 61 C.L.R. 596. 3 1939 62 C.L.R. 457. It is important to observe the distinction that gambling is number trade, companymerce and intercourse within the meaning of s. 92 otherwise the companytrol of gambling in Australia would be attended with companystitutional difficulties. Williams J. did number companysider it necessary to express any final opinion on the question whether there companyld be inter- State companymerce in respect of lottery tickets. He took the view that ss. 20 and 21 of the New South Wales Act were on their face companycerned and companycerned only with intra-State transactions and that their provisions did number directly hinder, burden or delay any inter-State trade, companymerce or intercourse. His Lordship observed that there was numberhing in the reasoning in the judgment in the Bank case or in subsequent decisions to indicate that the King v. Connare 1 and King v. Martin 2 were number rightly decided. He quoted, with approval, the observations of Dixon J. in Martins case. Fullagar J. also took the view that the previous decisions of the High Court in Connares case 1 and Martins case 2 were rightly decided for the reasons given by Dixon J. Kitto J. dissented from the majority view. Taylor J. who was also in favour of the validity of the impugned law, observed No simple legislative expedient purporting to transmute trade and companymerce into something else will remove it from the ambit of s. 92. But whilst asserting the width of the field in which s. 92 may operate it is necessary to observe that number every transaction which employs the forms of trade and companymerce will, as trade and companymerce, invoke its protection. The sale of stolen goods, when the transaction is juristically analysed, is numberdifferent from the sale of any other goods but can it be doubted that the Parliament of any State may prohibit the sale of stolen goods without infringing s. 92 of the Constitution ? The only feature which distinguishes such a transaction from trade and companymerce as generally understood is to be found in the subject of the transaction there is numberdifference in the means adopted for carrying it out. Yet it may be said that in essence such a transaction 1 193 61 C.L.R. 596. 2 1939 62 C.L.R. 457. companystitutes numberpart of trade and companymerce as that expression is generally understood. Numerous examples of other transactions may be given, such as the sale of a forged passport, or, the sale of companynterfeit money, which provoke the same companyment and, although legislation prohibiting such transactions may, possibly, be thought to be legally justifiable pursuant to what has, on occasions, been referred to as a Police power, I prefer to think that the subjects of such transactions are number, on any view, the subjects of trade and companymerce as that expression is used in s. 92 and that the protection afforded by that section has numberhing to do with such transactions even though they may require, for their companysummation, the employment of instru- ments, whereby inter-State trade and companymerce is companymonly carried on. After referring to the history of lotteries in England the learned Judge companycluded The foregoing observations give some indication of the attitude of the law for over two and a half centuries towards the carrying on of lotteries. But they show also that, in this companyntry, lotteries were, from the moment of its first settlement, companymon and public nuisances and that, in general, it was impossible to companyduct them except in violation of the law. Indeed it was impracticable for any person to companyduct a lottery without achieving the status of a rogue and a vagabond. In the Constitution of the United States of America there is numbercounterpart to Art. 301 of our Constitution or s. 92 of the Australian Constitution. The problem of gambling came up before the companyrts in America in quite different setting. Article 1, s. 8, sub-s. 3 of the Constitution of the United States companypendiously called the companymerce clause gives power to the Congress to regulate companymerce with foreign nations and among the several States and with the Indian tribes. Congress having made law regulating gambling activities which extended across the State borders, the question arose whether the making of the law was within the legislative companypetence of the Congress, that is to say whether it companyld be brought within the companymerce clause. The question depended for its answer on the further question whether the gambling activities companyld be said to be companymerce amongst the States. If it companyld, then it was open to Congress to make the law in exercise of its legislative powers under the companymerce clause. More often than number gambling activities extend from State to State and, in view of the companymerce clause, numberState Legislature can make a law for regulating inter-State activities in the nature of trade. If betting and gambling does number fall within the ambit of the companymerce clause, then neither the Congress number the State Legislature can in any way companytrol the same. In such circumstances, the Supreme Court of America thought it right to give a wide meaning to the word companymerce so as to include gambling within the companymerce clause and thereby enable the Congress to regulate and companytrol the same. Thus in Champion v. Ames 1 the carriage of lottery tickets from one State to another by an express companypany was held to be inter-State companymerce and the companyrt upheld the law made by Congress which made such carriage an offence. In Hipolite Egg Co. v. United States 2 the Pure Food Act which prohibited the importation of adulterated food was upheld as an exercise of the power of the Congress to regulate companymerce. The prohibition of transportation of women for immoral purposes from one State to another or to a foreign, land has also been held to be within the companymerce clause see Hoke v. United States 3 . SO has the prohibition of obscene literature and articles for immoral use. Reference has also been made to the cases of United States v. Kahriger 4 and Lewis V. United States 5 to support the companytention of the appellant State that the Supreme Court of the United States looked with great disfavour on gambling activities. In the last mentioned case it was roundly stated at p. 480 that there is numberconstitutional right to gamble . 1 1903 188 U.S. 321 47 L. Ed. 492. 2 1911 220 U.S. 45 55 L. Ed. 364. 3 1913 227 U.S. 308 57 L. Ed. 523. 4 1953 345 U.S. 22 97 L. Ed. 754. 5 1955 348 U.S. 419 99 L. Ed. 475. In companystruing the provisions of our Constitution the decisions of the American Supreme Court on the companymerce clause and the decisions of the Australian High Court and of the Privy Council on s. 92 of the Australian Constitution should, for reasons pointed out by this Court in State of Travancore-Cochin 1. The Bombay Co. Ltd. 1 , be used with caution and circumspection. Our Constitution differs from both American and Australian Constitutions. There is numberhing in the American Constitution companyresponding to our Art. 19 1 g or Art. 301. In the United States the problem was that if gambling did number companye within the companymerce clause, then neither the Congress number any State Legislature companyld interfere with or regulate inter-State gambling. Our Constitution, however, has provided adequate safeguards in cl. 6 of Art. 19 and in Arts. 302-305. The scheme of the Australian Constitution also is different from that of ours, for in the Australian Constitution there is numbersuch provision as we have in Art. 19 6 or Arts. 302-304 of our Constitution. The provision of s. 92 of the Australian Constitution being in terms unlimited and unqualified the judicial authorities interpreting the same had to import certain restrictions and limitations dictated by companymon sense and the exigencies of modern society. This they did, in some cases, by holding that certain activities did number amount to trade, companymerce or intercourse and, in other cases, by applying the doctrine of pith and substance and holding that the impugned law was number a law with respect to trade, companymerce or intercourse. The difficulty which faced the judicial authorities interpreting s. 92 of the Australian Constitution cannot arise under our Constitution, for our Constitution did number stop at declaring by Art. 19 1 g a fundamental right to carry on trade or business or at declaring by Art. 301 the freedom of trade, companymerce and inter. companyrse but proceeded to make provision by Art. 19 6 and Arts. 302-305 for imposing in the interest of the general public reasonable restrictions on the exercise of the rights guaranteed and declared by Art. 19 1 g and Art. 301. As one of us said in P. P. Kutti Keya 1 1952 S.C.R. 1112 at p. 1121 The State of Madras 1 the framers of our Constitution, being aware of the problems with which the Australian Government had been companyfronted by reason of s. 92, sought to solve them by enacting limitations in Part XIII itself on the freedom guaranteed in Art. 301. Our task, therefore, will be to interpret our Constitution and ascertain whether the prize companypetitions falling within the definition of the impugned Act, all of which are of a gambling nature, can be said to be a trade or business within the meaning of Art. 19 1 g or trade, companymerce and intercourse within the meaning of Art. 301 of our Constitution. The scheme of our Constitution, as already indicated, is to protect the freedom of each individual citizen to carry on his trade or business. This it does by Art. 19 1 g . This guaranteed right is, however, subject to Art. 19 6 which protects a law which imposes, in the interest of the general public, reasonable restrictions on the exercise of the fundamental right guaranteed by Art. 19 1 g . Our Constitution also proclaims by Art. 301 the freedom of trade, companymerce and intercourse throughout the territory of India subject to the provisions of Arts. 302-305 which permit the imposition of reasonable restriction by Parliament and the State Legislatures. The underlying idea in making trade, companymerce and intercourse with, as well as within, the States free undoubtedly was to emphasise the unity of India and to ensure that numberbarriers might be set up to break up the national unity. One important point to numbere is that the language used in Art. 19 1 g and Art. 301 is quite general and that the provisions for restricting the exercise of the fundamental right and the declared freedom of the companyntrys trade, companymerce and intercourse are made separately, e.g., by Art. 19 6 and Arts. 302-305. This circumstance is fastened upon by learned companynsel for the petitioners for companytending that the right guaranteed by Art. 19 1 g and the freedom declared by Art. 301 should, in the first instance and to start with, be widely and liberally companystrued and then reasonable restrictions may be superimposed on that right under Art. 19 6 or Arts. 302-305 in the interest of the general public. According A.I.R. 1954 mad. 621. to him the words trade or business or companymerce should be read in their widest amplitude as meaning any activity which is undertaken or carried on with a view to earning profit. There is numberhing in those two Arts. 19 1 g and 301, which, he says, may qualify or cut down the meaning of the critical words. He companytends that there is numberjustification for excluding from the meaning of those words activities which may be looked upon with disfavour by the State or the Court as injurious to public morality or public interest. The argument is that if the trade or business is of the last mentioned character, then the appropriate Legislature may impose restrictions which will be justiciable by the companyrts and this restriction may, in appropriate cases, even extend to total prohibition. Our attention has been drawn to Art. 25 where the limiting words subject to public order, morality and health are used and it is pointed out that numbersuch limiting words are to be found in Art. 19 1 g or Art. 301. In short the argument is that Art. 19 1 g and Art. 301 guarantee and declare the freedom of all activities undertaken and carried on with a view to earning profit and the safeguard is provided in Art. 19 6 and Arts. 302-305. The proper approach to the task of companystruction of these provisions of our Constitution, it is urged, is to start with absolute freedom and then to permit the State to cut it down, if necessary, by restrictions which may even extend to total prohibition. On this argument it will follow that criminal activities undertaken and carried on with a view to earning profit will be protected as fundamental rights until they are restricted by law. Thus there will be a guaranteed right to carry on a business of hiring out goondas to companymit assault or even murder, of housebreaking, of selling obscene pictures, of trafficking in women and so on until the law curbs or stops such activities. This appears to us to be companypletely unrealistic and incongruous. We have numberdoubt that there are certainactivities which can under numbercircumstance be regarded as trade or business or companymerce although the usual forms and instruments are employed therein. To exclude those activities from the meaning of those words is number to cut down their meaning at all but to say only that they are number within the true meaning of those words. Learned companynsel has to companycede that there can be numbertrade or business in crime but submits that this principle should number be extended and that in any event there is numberreason to hold that gambling does number fall within the words trade or business or companymerce as used in the Articles under companysideration. The question arises whether our Constitution makers ever intended that gambling should be a fundamental right within the meaning of Art. 19 1 g or within the protected freedom declared by Art. 301. The avowed purpose of our Constitution is to create a welfare State. The directive principles of State policy set forth in Part IV of our Constitution enjoin upon the State the duty to strive to promote the welfare of the people by securing and protecting, as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of the national life. It is the duty of the State to secure to every citizen, men and women, the right to an adequate means of livelihood and to see that the health and strength of workers, men and women, and the tender age of children are number abused, to protect children and youths against exploitation and against moral and material abandonment. It is to be the endeavour of the State to secure a living wage, companyditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities, to protect the weaker sections of the people from social injustice and all forms of exploitation, to raise the standard of living of its people and the improvement of public health. The question canvassed before us is whether the Constitution makers who set up such an ideal of a welfare State companyld possibly have intended to elevate betting and gambling on the level of companyntrys trade or business or companymerce and to guarantee to its citizens, the right to carry on the same. There can be only one answer to the question. From ancient times seers and law givers of India looked upon gambling as a sinful and pernicious vice and deprecated its practice. Hymn XXXIV of the Rigveda proclaims the demerit of gambling. Verses 7, 10 and 13 say 7 Dice verily are armed with goads and driving hooks, deceiving and tormenting, causing grievous woe. They give frail gifts and then destroy the man who wins, thickly anointed with the players fairest good. 10 The gamblers wife is left forlorn and wretched the mother mourns the son who wanders homeless. In companystant fear, in debt, and seeking riches, he goes by night unto the home of others. 11 Play number with dice number cultivate thy companyn- land. Enjoy the gain, and deem that wealth sufficient. There are thy cattle, there thy wife, O gambler. So this good Savitar himself hath told me. The Mahabharata deprecates gambling by depicting the woeful companyditions of the Pandavas who had gambled away their kingdom. Manu forbade gambling altogether. Verse 221 advises the king to exclude from his realm gambling and betting, for those two vices cause the destruction of the kingdom of princes. Verse 224 enjoins upon the king the duty to companyporally punish all those persons who either gamble or bet or provide an opportunity for it. Verse 225 calls upon the king to instantly banish all gamblers from his town. In verse 226 the gamblers are described as secret thieves who companystantly harass the good subjects by their forbidden practices. Verse 227 calls gambling a vice causing great enmity and advises wise men number to practise it even for amusement. The companycluding verse 228 provides that on every man who addicts himself to that vice either secretly or openly the king may inflict punishment according to his discretion. While Manu companydemned gambling outright, Yajnavalkya sought to bring it under State companytrol but he too in verse 202 2 provided that persons gambling with false dice or other instruments should be branded and punished by the king. Kautilya also advocated State companytrol of gambling and, as a practical person that he was, was number-averse to the State earning some revenue therefrom. Vrihaspati dealing with gambling in chapter XXVI, verse 199, recognises that gambling had been totally prohibited by Manu because it destroyed truth, honesty and -wealth, while other law givers permitted it when companyducted under the companytrol of the State so as to allow the king a share of every stake. Such was the numberion of Hindu law givers regarding the vice of gambling. Hamilton in his Hedaya, vol. IV, book XLIV, includes gambling as a kiraheeat or abomination. He says It is an abomination to play at chess, dice or any other game for if anything is staked it is gambling, which is expressly prohibited in the Koran or if, on the other band, numberhing be hazarded it is useless and vain. The wagering company. tracts of the type which formed the subject-matter of the case of Ramloll v. Soojumnull 1 and was upheld by the Privy Council as number repugnant to the English Common Law were subsequently prohibited by Act XXI of 1948 which was enacted on the suggestion of Lord Campbell made in that case and introduced in India provisions similar to those of the English Gaming Act 8 9 Vict. c. 109 . Bengal Gambling Act Ben. II of 1867 provided for the punishment of public gambling and the keeping of companymon gaming house in the territories subject to the Lieutenant Governor of Bengal. Lottery has been, since 1870, made an offence, under s. 294A of the Indian Penal Code. Gambling agreements have been declared to be void under the Indian Contract Act, 1872 s. 30 . This in short is how gambling is viewed in India. Before the Legislature intervened, gambling and wagering were number prohibited by the English Common Law although the English companyrts looked upon it with disfavour and discouraged it on grounds of public policy by denying procedural facilities which were granted to other litigants. The Scottish companyrts, however, have always refused to recognise the validity of wagering companytracts and have held that sponsiones ludicroe, as they style such companytracts, are void by the Common Law of Scotland. Gambling and Betting Act, 1 1848 4 M.I.A. 339. 1664 16 Car. 11, c. 7 was directed against fraudulent and excessive gambling and betting at games or sports. This was followed by the Gaming Act of 1710 9 Anne.c. 19 . The Marine Insurance Act 1745 19 Geo. 11 C. 37 for the first time prohibited wagering policies on risks companynected with British shipping. This was supplemented by the Marine -Insurance Act 1788 28 Geo. III c. 56 . The Life Insurance Act, 1774 14 Geo. III c. 48 though number intended to prohibit wagering in general, prohibited wagering under the cloak- of a mercantile document which purported to be a companytract of insurance. Then came the Gaming Act of 1845 8 and 9 Vict. c. 109 which for the first time declared all companytracts made by way of gaming or wagering void irrespective of their form or subject-matter. The provisions of this Act were adopted by our Act XXI of 1948 as here in before mentioned. The Gaming Act of 1892 55 and 56 Viet. c. 9 further tightened up the law. As far back as 1850 the Supreme Court of America in Phalen Virginia 1 observed Experience has shown that the companymon forms of gambling are companyparatively innocuous when placed in companytrast with widespread pestilence of lotteries. The former are companyfined to a few persons and places, but the latter infests the whole companymunity it enters every dwelling it reaches every class it preys upon the hard earnings of the poor it plunders the ignorant and the simple. The observations were quoted, with approval, in Douglas v. Kentucky 2 . After quoting the passage from Phalen v. Virginia 1 the judgment proceeded Is the state forbidden by the supreme law of the land from protecting its people at all times from practices which it companyceives to be attended by such ruinous results? Can the Legislature of a State companytract away its power to establish such regulations as are reasonably necessary from time to time to protect the public morals against the, evils of lotteries ? 1 1850 49 U.S. 163 12 L. Ed. 1030,1033. 2 1897 168 U.S. 488 42 L. Ed. 553, 555. It will be abundantly clear from the foregoing observations that the activities which have been companydemned in this companyntry from ancient times appear to have been equally discouraged and looked upon with disfavour in England, Scotland, the United States of America and in Australia in the cases referred to above. We find it difficult to accept the companytention that those activities which encourage a spirit of reckless propensity for making easy gain by lot or chance, which lead to the loss of the hard earned money of the undiscerning and improvident companymon man and thereby lower his standard of living and drive him into a chronic state of indebtedness and eventually disrupt the peace and happiness of his humble home companyld possibly have been intended by our Constitution makers to be raised to the status of trade, companymerce or intercourse and to be made the subject-matter of a fundamental right guaranteed by Art. 19 1 g . We find it difficult to persuade ourselves that gambling was ever intended to form any part of this ancient companyntrys trade, companymerce or intercourse to be declared as free under Art. 301. It is number our purpose number is it neces- sary for us in deciding this case to attempt an exhaustive definition of the word trade, business, or intercourse. We are, however, clearly of opinion that whatever else may or may number be regarded as falling within the meaning of these words, gambling cannot certainly be taken as one of them. We are companyvinced and satisfied that the real purpose of Arts. 19 1 g and 301 companyld number possibly have been to guarantee or declare the freedom of gambling. Gambling activities from their very nature and in essence are extra-commercium although the external forms, formalities and instruments of trade may be employed and they are number protected either by Art. 19 1 g or Art. 301 of our Constitution. The Court of Appeal we have already said, took the view that it was number open to the State, which had number thought fit to prohibit these prize companypetitions but had sought to make a profit out of them by levying a tax, to companytend at the same time that it was illegal or was number a trade at all. But as pointed out in United States v. Kahrigar 1 , the fact of issuing a licence or imposing a tax means numberhing except that the licensee shall be subject to numberpenalties under the law if he pays it. Lewis v. United States of America 2 also recognises that the Federal Government may tax what it also forbids and that numberody has a companystitutional right to gamble but that if he elects to do, so, though it be unlawful, he must pay the tax. In this companynection reference may be made to the observation of Rowlatt J. in Mann v. Nash 3 The revenue authorities, representing the State, are merely looking at an accomplished fact. It is number companydoning it or taking part in it. Further down he said It is merely taxing the individual with reference to certain facts. It is number a partner or a sharer in the illegality. That crime is number a business is also recognised in F. A. Lindsay, A. E. Woodward and W. Hiscox v. The Commissioners of Inland Revenue 4 per Lord President Clyde and per Lord Sands and in Southern H. M. Inspector of Taxes v. A. B. The fact that regulatory provisions have been enacted to companytrol gambling by issuing licences and by imposing taxes does number in any way alter the nature of gambling which is inherently vicious and pernicious. We also arrive at the same result by applying the doctrine of pith and substance. As Lord Porter pointed out The phrase raised in a companyvenient form an appropriate question in cases where the real issue is one of subject matter and it may also serve a useful purpose in the process of deciding whether a particular enactment is a law with respect to trade, companymerce or intercourse as such or whether it is a law with respect to some other subject which incidentally trenches upon trade, companymerce and intercourse. Reference has already been made to the observations 1 345 U.S. 22 97 L. Ed. 754. 2 348 U.S. 49 99 L. Ed- 475. L. R. 1932 1 K.B.D. 752 at P. 757. 4 18 T.C. 43. L.R. 1933 1 K.B. 713 18 T.C. 59. of Dixon J., as he then was, in King v. Martin 1 . Adapt- ing his language, we may say that when Art. 19 1 g guarantees or Art. 301 declares the freedom of trade they describe human activities in a specific aspect. They single out attributes which the act or transaction may wear and make the freedom, which they companyfer, depend upon those attributes. The freedom secured by the two Articles, we think, implies that numberunreasonable restraint or burden shall be placed upon an act falling under that description because it is trade or companymerce or intercourse. We have analysed the provisions of the impugned Act and it is quite clear that the Act does number purport directly to interfere with trade, companymerce or intercourse as such, for the criterion of its application is the specific gambling nature of the transaction which it restricts. The purpose of the Act is number to restrict anything which brings the transactions under the description of trade, companymerce or intercourse. In other words, the Act is in pith and substance an Act with respect to betting and gambling. To companytrol and restrict betting and gambling is number to interfere with trade, companymerce or intercourse as such but to keep the flow of trade, companymerce and intercourse free and unpolluted and to save it from anti-social activities. In our opinion, therefore, the impugned Act deals with gambling which is number trade, companymerce or business and, therefore, the validity of the Act has number to be decided by the yardstick of reasonableness and public interest laid down in Arts. 19 6 and 304. The appeal against the stringency and harshness, if any, of the law does number lie to a companyrt of law. In the view we have taken, it is number necessary for us to companysider or express any opinion on this occasion as to the vexed question whether restriction, as company. templated in Arts. 19 6 and 304 b , may extend to total prohibition and this is so because we cannot persuade ourselves to hold that Art. 19 1 g or Art. 301 companyprises all activities undertaken with a view to profit as trade within the meaning of those Articles. Nor is it necessary for us on this occasion to companysider 1 1939 62 C.L.R. 457. whether a companypany is a citizen within the meaning of Art 19 and indeed the point has number been argued before us. The last point urged by the petitioners is that assuming that the impugned Act deals only with gambling and that gambling is number trade or business or companymerce and is, therefore, number entitled to the protection of our Constitution, the prize companypetitions run by them are in fact number of a gambling nature. The trial companyrt accepted this companytention while the Court of Appeal rejected it. We have examined the scheme and the rules and the official solutions and the explanations in support thereof and we have companye to the companyclusion that the companypetition at present run by the petitioners under the name of R.M.D.C. Crosswords are of a gambling nature. Our view so closely accords with that of the Court of Appeal that we find it unnecessary to go into the details of the scheme. To start with, we find that the Board of Adjudicators pick up nine of the clues and -select only those companypetitors whose answers companyrespond with the official solution of those nine clues. Those nine clues may be from the top, may be from the bottom or may be selected at random. It is said that they-are like nine companypulsory questions in a school examination but then in a school examination, the students are told which are the nine companypulsory questions and they can take particular care with regard to those but in this scheme there is numberknowing which nine will be selected and those companypetitors whose answers do number accord with the official solution are debarred from being companysidered for the first prize. A companypetitor may have given companyrect answers to eight of the nine selected clues and may have given companyrect answers to the remaining eight so that he has sent in sixteen companyrect answers but he will, nevertheless, number be companysidered for the first prize because his answers to the nine selected questions did number agree with the official solutions of those nine clues. This is a chance element to start with. We have then seen that the companypeting words out of which one is to be selected are in some cases equally apt. We are number satisfied that the word selected by the Board is the more apt word in many. cases. The reasons given by them appear to us to be laboured and artificial and even arbitrary in some cases. On the whole, we have companye to the companyclusion that the Court of Appeal was right in its companyclusion that in point of fact the prize companypetitions run by the petitioners partake of a gambling nature and, therefore, fall within the definition and are to be governed by the regulatory and taxing provisions of the Act. For the reasons stated above, we have companye to the companyclusion that the impugned law is a law with respect to betting and gambling under Entry 34 and the impugned taxing section is a law with respect to tax on betting and gambling under Entry 62 and that- it was within the legislative companypetence of the State Legislature to have enacted it. There is sufficient territorial nexus to entitle the State Legislature to companylect the tax from the petitioners who carry on the prize companypetitions through the medium of a newspaper printed and published outside the State of Bombay. The prize companypetitions being of a gambling nature, they cannot be regarded as trade or companymerce and as such the petitioners cannot claim any fundamental right under Art. 19 1 g in respect of such companypetitions, number are they entitled to the protection of Art. 301.

Case appeal was accepted by the Supreme Court

CRIMINAL APPFLLATE JURISDICTION Criminal Appeal No. 205 of 1956. Appeal by special leave from the judgment and order dated the 30th November, 1955, of the Punjab High Court in Crimi- nal Appeal No. 282 of 1955, arising out of the judgment and order dated the 15th February, 1955, of the Court of the Additional Sessions Judge at Amritsar in Sessions Case No. 64 of Trial No. 6 of 1955. L. Anand, and S. N. Anand, for the appellant. Kartar Singh Chawla, Assistant Advocate-General, for the State of Punjab and T. M. Sen, for the respondent. 1957. September 17. The following Judgment of the Court was delivered by KAPUR J.-This is an appeal against the judgment and order of the Punjab High Court reversing an order of acquittal by the Additional Sessions Judge, Amritsar. The appellant Bakshish Singh and his brother Gurbakshi Singh were tried for an offence under ss. 302/34 of the Indian Penal Code but were acquitted. Against this judgment the State took an appeal to the High Court. As Gurbaksh Singh was said to be ab- sconding the appeal against the appellant alone was heard and decided by the High Court. On August 1, 1954, sometime between 7 and 8 p.m Bachhinder Singh son of Bhagwan Singh of village Kairon was shot in the lane in front of their house and as a result of bullet injuries be died the next day in the hospital at Amritsar. He was at the time of shooting accompanied by his younger brother Narvel Singh, a boy of 13, and after getting injured Bachhinder Singh and his brother returned to the house. Bhagwan Singh states that he was informed of the identity of the assailants by Bachhinder Singh who was, at his own request, carried from the house to the hospital at Kairon but as the injuries were serious the doctor at Kairon rendered first aid and advised the father to take his son to V. J. Hospital at Amritsar. Bhagwan Singh then took Bachhinder Singh to the Railway Station but before the arrival of the train he went to the Police Post at Kairon which is at a distance of about 100 yds. from the Railway Station in order to make a report. As the Assistant Sub Inspector was away at Sarhali, he returned to the Railway Station and took his son to the Amritsar hospital by the train leaving Kairon at 9-47 p.m. Bhagwan Singh was accompanied at that time by his younger son, Narvel Singh, P.W. 12, and by Shamir Singh, Inder Singh and Narinjan Singh. Soon after their arrival at the Amritsar hospital Bachhinder Singh was examined by Dr. Kanwal Ki- shore, P.W. 2, at 11-45 p.m. and finding the injury to be of a serious nature the doctor sent information to the Police as a result of which Head Constable Maya Ram Sharma, P.W. 4, arrived at the hospital sometime after midnight and, in the presence of Dr. Mahavir Sud, P.W. 17, recorded the dying declaration of Bachhinder Singh, Exhibit P-H, after getting a certificate from the doctor that the injured person was in a fit state to make a statement. This statement is the basis of the First Information Report, Exhibit P-H. 1, which is a companyy of Exhibit P-H. This report was recorded on August 2, 1954, at 7-50 a.m. at Police Station Sarhali which, we were told, is about 20 miles or so away from Amritsar. In the early hours of the morning Dr. K. C. Saronwala P.W. I performed an operation on Bachhinder Singh and extracted a bullet from the left abdominal wall which was handed over to the Police. But Bachhinder Singh died at 1-35 p.m. on August 2, 1954. An inquest report Exhibit P-K was prepared at 2-30 p.m. by Head Constable Maya Ram, P.W. 4. The case for the prosecution rests on the dying declaration of Bachhinder Singh, Ex. P-H, and on the statement of Narvel Singh, P.W. 12, who was an eye witness to the occur- rence and on the statement made by the deceased to his father as to his assailant as soon as he Bachhinder Singh was brought to the house after receiving the injuries. The prosecution also relied on an extra-judicial companyfession made to Teja Singh, P.W. 13, but both the companyrts below have rejected this piece of evidence and it is unnecessary to companysider it any further. The learned Additional Sessions Judge rejected the dying declaration made by Bachhinder Singh on two grounds that at the time of recording the dying declaration number only Bhagwan Singh, the father, and Narvel Singh, the brother of Bachhin- der Singh, were present but the police officer had actually made enquiries from them about the occurrence before he proceeded to record the dying declaration of Bachhinder Singh de- ceased. Head Constable Maya Ram, P.W. 4, has admitted in cross-examination that Bachhinder Singh gave his statement in Punjabi but the form and the detailed account given in the statement, Exhibit P-H, would show that it was number the product of Bachhinder Singhs creation alone but it was a touched up declaration of the deceased. It is laid down in 1954 Lahore 805 that a dying declaration which records the very words of the dying man unassisted by interested persons is most valuable evidence but the value of a dying declara- tion altogether disappears when parts of it had obviously been supplied to the dead man by other persons whether interested or Police Officer. As the dying declaration, Exhibit P-H, in this case cannot be regarded as the creation of Bachhinder Singh deceased, numberreliance whatsoever can be placed on it and it companyld number form the basis for the companyvic- tion of any of the accused. The learned Judges of the High Court did number agree with this criticism. Birhan Narain J., who delivered the main judg- ment, said This criticism appears to me to be without any substance. The statement was recorded by Head Constable Maya Ram who was posted in Amritsar and was number posted in village Kairon and therefore had numberknowledge of the parties number had any interest in them Thus there was numberreason why he should record the statement falsely or irregularly. Throughout the time that the statement was recorded Dr. Mahavir Sud of the Amritsar hospital was present. He has appeared as P.W. 17 in the present case. He is a respectable and disinterested person and he is positive in his testimony before the companyrt that the statement was made by the deceased voluntarily and that there was numberody present to prompt him. He has further stated that he did number allow any person to be present at that time. There is absolutely numberreason for doubting the companyrectness of this statement Coming to the other objection of the Additional Sessions Judge, it is difficult to understand the significance at- tached by him to the fact that the deceased spoke in Punjabi while the statement was recorded by Maya Ram in Urdu. The companyrt language is Urdu and the Police generally records statements in Urdu even if they are made in the Punjabi language. I have numberdoubt in my mind that the dying decla- ration recorded in the present case is a voluntary one and was made without any prompting from anybody. The High Court in our opinion companyrectly appreciated the evidence and was right in accepting the authenticity of the dying declaration. The statement of Maya Ram, P. W. 4, does number support the criticism of the learned trial judge. And he had read more in the statement of Narvel Singh, P. W. 12, made before the Committing Magistrate, than it really company- tains. It is unfortunate that the criticism has proceeded on the English record of the Magistrates Court which does number appear to have been companyrectly recorded as the Urdu record is in many parts materially different. The fact that the statement companytained in Exhibit P-H was made without any prompting is also supported by the testimony of a wholly disinterested witness, Dr. Mahavir Sud, whose statement made before the Committing Magistrate was transferred at the trial stage under s. 33 of the Evidence Act. He stated The statement of Bachhinder Singh was voluntary and there was numbere to prompt it. I did number allow any attendant on Bachhinder Singh then. In cross-examination he made it clearer that there was numberrelation or friend of the deceased person when the statement was recorded. Some criticism was levelled against the dying declaration based on a sentence in the statement of Dr. Mahavir Sud P. W. 17 that the Head Consta- ble put certain questions to clarify the ambiguities and these questions and answers do number find place in Exhibit P- H, the record of the dying declaration. No such question was put to the Head Constable who recorded the statement. The Head Constable stated that the dying declaration was written at the declarants own dictation without any addi- tion or omission. In cross-examination numberhing was asked as to any questions having been put to the deceased by this witness. Therein the witness also stated It is number companyrect that I first made the inquiry from the father of the deceased and other persons before I proceeded to record his statement . He also made it clear that before he allowed the statement to be made he satisfied himself that Bachhinder Singh was in a fit state to make the statement. We are of the opinion that the High Court rightly held the dying declaration to be a statement made by the deceased unaided by any outside agency and without prompting by anybody. The declarant was free from any outside influence in making his statement. Another reason given by the Additional Sessions Judge for rejecting the dying declaration was that the deceased gave the narrative of events in Punjabi and the statement was taken down in urdu. In the Punjab that is how the dying declarations are taken down and that has been so ever since the companyrts were established and judicial authority has never held that to be an infirmity in dying declarations making them inefficacious. As a matter of fact in the Punjab the language used in the subordinate companyrts and that employed by the Police for recording of statements has always been Urdu and the recording of the dying declaration in Urdu cannot be a ground for saying that the statement does number companyrectly reproduce what was stated by the declarant. This, in our opinion, was a wholly in. adequate reason for-rejecting the dying declaration. Exhibit P-H, the dying declaration, is a long document and is a narrative of a large number of incidents which happened before the actual assault. Such long statements which are more in the nature of First Information Reports than recital of the cause of death or circumstances resulting in it are likely to give the impression of their being number genuine or number having been made unaided and without prompting. The dying declaration is the statement made by a person as to the cause of his death or as to any of the circumstances of the transaction which resulted in his death and such details which fall outside the ambit of this are number strictly within the permissible limits laid down by s. 32 1 of the Evi- dence Act and unless absolutely necessary to make a state- ment companyerent or companyplete should number be included in the statement. We are informed that, in the Punjab, numberrules have been made in regard to the recording of dying declara- tions which, we are told, has been done in several other States. We think it would be desirable if some such rules were framed and included in the Rules and Orders made by the High Court for the guidance of persons recording dying declarations. Of companyrse the authenticity of the dying declaration has to be judged in accordance with the circum- stances of each case depending upon many factors which would vary with each case but those recording such statements would be well advised to keep in view the fact that the object of a dying declaration is to get from the person making the statement the cause of death or the circumstances of the transaction which resulted in death. The admissibility of the statement of Dr. Mahavir Sud was assailed by companynsel for the appellant on the ground that the companyditions laid down for the admissibility of statements under s. 33 had number been companyplied with and several decided cases were relied upon. This question does number seem to have been raised at any previous stage of the proceedings, nei- ther before the Additional Sessions Judge number before the High Court, and this criticism seems to be without much substance. At the trial the prosecution produced Foot Constable Kartar Singh, P. W. 14, who deposed that he took the summons for this witness to the hospital where he was previ- ously employed and the Superintendent of the hospital made a report that he was numberlonger in service and it was number known where he was. This witness also stated that from the inquiries made by me, I learnt that his whereabouts are number known. In cross-examination he again stated that he made inquiries but he companyld number discover the whereabouts of this witness. After the statement of Kartar Singh, P. W. 14, the Public Prosecutor made a statement that Dr. Mahavir Suds whereabouts were number known and prayed that his statement be transferred under s. 33 of the Evidence Act on the ground that there was numberlikelihood of the witness being available without unreasonable delay and expense and numberobjection is shown to have been taken by the defence at that stage. Thereupon the learned trial judge ordered the statement to be transferred under s. 33 of the Evidence Act. He might have been well advised to give fuller reasons for making the order transferring the statement. It appears to us that the learned judge transferred it on the ground of unreasonable delay and expense and we do number find any infirmity in this order of transfer. Counsel then companytended that for the efficacy of the dying declaration, companyroboration was essential. In the present case there is the statement of Narvel Singh, P. W. 12, who is an eye witness to the occurrence which is relied upon by the prosecution as companyroboration of the dying declaration. The learned Additional Sessions Judge rejected the testimony of this witness on the ground that there were discrepancies between his statement made in the companymitment proceedings and at the trial. We have already pointed out that the cross- examination of this witness was based on somewhat inaccurate English record of his statement in the Committing Court, the statement in Urdu record puts a different companyplexion on it. But even if this were number so the High Court, in our opinion, has taken a companyrect view of the testimony of this witness and has accepted it for companyent reasons. Besides Narvel Singh there is the statement of Bhagwan Singh, the father, who stated that as soon as Bachhinder Singh came into the house he mentioned the names of his assailants to him. The incident took place just outside the house of Bhagwan Singh and it was never disputed that he was present in the house when the incident took place. It is only natural that as soon as the injured son came into the house he would be asked as to who had injured him or would himself state who had caused him the injury. He was in his senses at that time and numberreason has been suggested why the son would number disclose to his father the names of his assail- ants. There is numberadequate reason for rejecting this por- tion of the testimony of Bhagwan Singh and merely because the dying declaration does number mention it, is hardly a reason for number accepting it. The number-production of Sucha Singh who is stated in the dying declaration and in the statement of Narvel Singh, P.W. 12, to have witnessed the occurrence was companymented upon by companynsel as a very serious omission. The Public Prosecutor stated at the trial that he was giving up Sucha Singh as he had been won over. Therefore, if produced, Sucha Singh would have been numberbetter than a suborned. witnesss. He was number a witness essential to the unfolding of the narrative on which the prosecution was based and if examined the result would have been companyfusion, because the prosecution would have automatically proceeded to discredit him by cross-examination. No oblique reason for his number-production was alleged, least of all proved. There was, therefore, numberobligation on the part of the prosecution to examine this witness See Abdul Moham. mad v. Attorney General of Pales- tine 1 Stephen Servaratne v. The King 1 Habeeb Moham- mad v. The State, of Hyderabad 3 . In the circumstances the companyrt would number interfere with the discretion of the prosecutor as to what witnesses should be called for the prosecution and numberadverse inference under s. 114 of the Evidence Act can be drawn against the State. The High Court, in our opinion, have kept in view companyrect principles governing appeals against acquittals and have rightly applied them to the circumstances A.I.R. 1945 P.C. 42 A.I.R. 1936 P.C. 289. 3 1954 S.C.R. 475. of this case. The erroneous view that the learned Sessions Judge took of the dying declaration and of the oral evidence were companypelling enough reasons for the reversal of that judgment.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 99 of 1954. Appeal from the judgment and order dated the 20th August, 1952, of the Bombay High Court in Appeal No. 43 of 1952 arising out of Original Suit No. 1262 of 1949. C. Chatterjee, J. B. Dadachanji and Rameshwar Nath, for the appellant. Porus A. Mehta and R. H. Dhebar, for the respondent. 1957. November 27. The following Judgment of the Court was delivered by VENKATARAMA AIYAR J.-On February 28,1934, the Appellant who is the religious head of the Dawoodi Bohra Community, passed an order excommunicating one Tyebbhai Moosaji Koicha. On July 17, 1920, the appellant had excommunicated two persons, Tahirbhai and Hasan Ali, and the validity of the order was questioned in a suit instituted in the Court of the Subordinate Judge, Barhampur. The litigation went up to the Privy Council, which held that the appellant as the religious head had the power to excommunicate a member of the companymunity, but that that power companyld only be exercised after observing the requisite 1009 formalities, and as in that case that had number been done, the order of excommunication was invalid. Vide Hasan Ali v. Mansoorali 1 . Apprehending that the order dated February 28, 1934, was open to challenge under the decision in Hasan Ali v. Mansoorali supra on the ground that it had number companyplied with the requisite formalities, the appellant started fresh proceedings, and on April 28, 1948, passed another order of excommunication. Thereupon, Tyebbhai Moosaji filed the present suit for a declaration that both the orders of excommunication dated February 28, 1934, and April 28, 1948, were invalid and for other companysequential reliefs. While this action was pending, the Legislature of the Province of Bombay passed the Bombay Prevention of Excommunication Act Bombay XLII of 1949 prohibiting excommunication, and that came into force on November 1, 1949. The plaintiff companytended that the effect of this legislation was to render the orders of excommunication illegal. The answer of the appellant to this companytention was, firstly, that the Act had numberretrospective operation, and that, in companysequence, the orders passed on February 28, 1934, and April 28, 1948, were valid, and remained unaffected by it and secondly, that the Act was itself unconstitutional, because the subject matter of the impugned legislation was number companyered by any of the entries in List 2 or 3 of Seventh Schedule to the Government of India Act, 1935, and the Legislature of the Province of Bombay had numbercompetence to enact the law. After the companying into force of the Constitution, the companytention was also raised that the right of the defendant to excommunicate members of the company- munity was protected by Arts. 25 and 26 of the Constitution, and that the impugned Act was void as infringing the same. The issues in the action were then settled, and issue No. 19, which was raised with reference to the above companytentions, was as follows Whether the orders of excommunication made in 1934 and or 1948 are invalid by reason of the A.I.R. 1948 P.C. 66. 1010 provisions of the Bombay Prevention of Excommunication Act of 1949? This was tried as a preliminary issue, and as it raised the question of the vires of a statute, the State of Bombay was impleaded as the second defendant in the suit. Shah J.who tried this issue, held that the impugned Act was retrospective in its operation, that it was within the companypetence of the Provincial Legislature, and further that it did number offend Arts. 25 and 26 of the Constitution. Against this finding, the present appellant preferred an appeal to a Bench of the Bombay High Court, and that was heard by Chagla C. J. and Bhagwati J. who held that under the Act, excommunication meant the companydition of being expelled, that it was a companytinuous state during which the person excommunicated was deprived of his rights and privileges, and that, therefore, the Act would operate to protect those rights from the date it came into operation. They further held that the Act was within the companypetence of the Legislature, and they also repelled the companytention that it infringed the rights guaranteed under Arts. 25 and 26 of the Constitution. In the result, they companycurred in the decision of Shah J. and dismissed the appeal but granted a certificate to appeal to this Court under Arts. 132 and 133 of the Constitution. Hence this appeal. Pending the appeal, the plaintiff died on March 11, 1953, and his daughter applied on May 22, 1953, to be substituted in his place. But eventually she did number press the application, and that was dismissed on October 5, 1953. In this Court by an order dated November 21, 1955, the cause title was amended by deleting the name of the plaintiff. Thus, the only parties who are number before the Court are the defendant and the State of Bombay. The question is whether in the events which have happened, the appeal can proceed. We are of opinion that it cannot. It should be remembered in this companynection that numberdecree had been passed in the suit. Only a finding has been given on a preliminary point, and it is that finding that has been the subject of 1011 appeal to the High Court of Bombay and thereafter to this Court. There are other issues still to be tried, and the action is thus undetermined. Now, the claim with which the plaintiff came to Court was that he was wrongly excommunicated, and that was an action personal to him. On the principle, actio personalis moritur cum persona when he died the suit should abate. As a matter of fact, his legal representative applied to be brought on record, but the application was number pressed. The result is that the suit has abated. This would ordinarily entail the dismissal of this appeal. Mr. N. C. Chatterjee for the appellant argues that as the State of Bombay had been impleaded as a party, and that as the decision on the question of the vires of the Act had been given in its presence, the appellant is entitled to companytinue the appeal against the State without reference to the plaintiff and seek the decision of this Court on the validity of the Act and relies on the decision of the Federal Court in The United Provinces v. Mst. Atiqa Begum and others 1 . There, a suit was filed by a landlord for recovery of rent. While it was pending in appeal, an Act was passed by the Legislature of the United Provinces validating certain Government numberifications requiring the landlords to give to the tenants remission of rent. The landlord companytended that the Act was ultra vires, and a Full Bench of the Allahabad High Court, for whose opinion the question was referred, agreed with this companytention. Thereafter, the Government of the United Provinces got itself impleaded as a party to the appeal of the landlord, and a decision having been given therein in accordance with the opinion of the Full Bench, it preferred an appeal to the Federal Court on a certificate granted under s. 205 of the Government of India Act, 1935, and companytended that the impugned Act was valid. The judgment-debtor himself did number file any appeal. The question was whether the Government was entitled to file the appeal when the party had number chosen to companytest the decree. It was held by the Federal Court that the scope of 1 1940 F.C.R. 110. 1012 s. 205 of the Government of India Act was wider than that of s. 96 of the Civil Procedure Code, and that the Government was entitled to file the appeal for getting a decision on the validity of the Act, numberwithstanding that it had numberinterest in the claim in the suit. This ruling has, in our opinion, numberapplication to the facts of the present case. Here, the action itself has abated, and there can be numberquestion of an appeal in relation thereto, as an appeal is only a companytinuation of the suit, and there can be numberquestion of companytinuing what does number exist. But apart from this, there is another formidable obstacle in the way of the appellant. Under Art. 132, an appeal lies to this Court only against judgments, decrees or final orders. That was also the position under s. 205 of the Government of India Act. Now, the order appealed against is only a decision on one of the issues, and it does number dispose of the suit. In The United Provinces v. Mst. Atiqa Begum and others supra , there was a decree, and the requirements of s. 205 were satisfied. Here, there is only a finding on a preliminary issue, and there is numberdecree or final order. The Explanation to Art. 132 provides that For the purposes of this Article, the expression final order includes an order deciding an issue which, if decided in favour of the appellant, would be sufficient for the final disposal of the case. Applying this test, even if we accept the companytention of the appellant that the impugned Act is bad, that would number finally dispose of the suit, as there are other issues, which have to be tried. We are clearly of opinion that the appeal is number companypetent under Art. 132, and the fact that a certificate has been given does number alter the position. It is said that the certificate is also under Art. 133, but under that article also, an appeal lies Only against judgments, decrees or final orders, and numbercertificate companyld be granted in respect of an interlocutory finding. The result is that this appeal must be dismissed, as number maintainable. We should add by way of abundant caution that as we express numberopinion on the 1013 companyrectness of the decision under appeal, this order will number preclude the appellant from claiming such rights as he may have, in appropriate proceedings which he may take.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE, JURISDICTION Criminal Appeal No. 145- A of 1954. Appeal under Article 132 1 of the Constitution of India from the Judgment and Order dated July 23, 1954, of the Madras High Court in Criminal Miscellaneous Petition No. 922 of 1954. Porus A. Mehta and R. H. Dhebar, for the appellants. Pocker and B. K. B. Naidu, for the respondent. 1957. April 11. The Judgment of the Court was delivered by IMAM J.-The appellant obtained a certificate from the Madras High Court to the effect that the case involved a substantial question of law as to the interpretation of the Constitution under Art. 132 1 , in companysequence of which the present appeal is before us. The respondent had filed a petition in the High Court under s. 491 of the Code of Criminal Procedure praying that directions in the nature of habeas companypus may be issued for his production before That Court to be dealt with according to law and for his release from imprisonment. The respondent had been arrested on June 1, 1954 in pursuance of a warrant issued on March 10, 1954 by the Collector of Malabar under s. 48 of the Madras Revenue Recovery Act Madras Act 11 of 1864 hereinafter referred to as the Act . The circumstances, as stated in the affidavits filed by the Collector and the Income Tax Officer of Kozikhode in the High Court, which led to the respondents arrest, were, that he had been assessed to income-tax for various assessment years and the total amount of tax remaining outstanding against him, in round figures, was Rs. 70,000. Some amount was recovered by the Collector in pursuance of a certificate issued by the Income Tax Officer under s. 46 2 of the Indian Income Tax Act and bY the Income Tax Officer himself under s. 46 5 A of the said Act. After deducting the amount so realised the arrears of income-tax were about Rs. 61,668 and odd for the assessment Years 1943-44, 1945 -46 to 1948-49. Meanwhile the Income Tax Officer had made enquiries into the affairs of the respondent and had discovered that he had sold certain properties of his between November 18, 1947 and March 25, 1948 to the tune of about Rs. 23,100. Demand numberice had been served upon him on November 6, 1947 and the series of transactions of sale started on November 18, 1947. Out of the said sum of Rs. 23,100, the respondent paid arrears of tax to the extent of Rs. 10,500 only. Enquiries also revealed that although the respondent had closed his business at Cannanore in August, 1947, he had set up a firm in 1948 at Tellichery carrying on an identical business in the name of V.P. Abdul Azeez Bros. companysisting of his one major and four minor sons. The respondent had alleged that the capital of this firm was mainly supplied from the sale of jewels belonging to his wife, that is, Abdul Azeezs mother. He denied that the above-mentioned firm belonged to him. In the assessment proceedings before the Income Tax Officer companycerning the firm V.P. Abdul Azeez Bros., the source of these jewels was gone into, but it was found that the same had number been proved and it was held that the business of V.P. Abdul Azeez Bros. belonged to the respondent. All these facts were companymunicated to the Collector by the Income Tax Officer who made independent enquiries for himself and had reason to believe that the respondent was wilfully withholding payment of arrears of tax and had been guilty of fraudulent companyduct in evading payment of tax. As a certificate had already been issued to him by the Income Tax Officer under s. 46 2 of the Indian Income Tax Act, the Collector proceeded under s. 48 of the Act to issue a warrant of arrest against the respondent in companysequence of which he was arrested and lodged in Central Jail, Cannanore. In the High Court, the petition under s. 491, Criminal Procedure Code, was heard by Mack and Krishna. swamy Nayudu JJ. which was allowed and they ordered that the respondent be set at liberty as his arrest was illegal. Mack J. thought that s. 48 of the Act was ultra vires the Constitution as it offended Art. 22. He did number deal at length with the argument that s. 48 offended Art. 21 as he was of the opinion that if that section was ultra vires, then the respondent had number been arrested in accordance with procedure, established by Saw and his arrest and imprisonment had been unlawful. On the other hand, if s. 48 was intra vires the Constitution, then the respondent had been lawfully deprived if his personal liberty. He was further of the opinion that s. 46 2 of the Indian Income Tax Act was ultra vires as it offended Art. 14 of the Constitution. Krishnaswami Nayudu J. was of the opinion that s.46 2 of the Indian Income Tax Act read with s. 48 of the Act offended Art. 14 of the Constitution. He was of the opinion that s. 48 of the Act offended Art. 21 of the Constitution to the extent that it afforded numberopportunity to the arrested person to appear before the Collector by himself or through a legal practitioner of his choice and to urge before him any defence open to him and that it did number provide for the production of the arrested person within 24 hours before a magistrate as required by Art. 22 2 . Relying upon the decision of this Court in A. K. Gopalan v. The State Of Madras 1 , he was of the opinion that the companytention that the provisions of Art. 21 had been infringed did number require serious companysideration because in so far as there was a law on the statute book on which the Collector had acted that would be sufficient to support the legality of the action taken by the Collector. On behalf of the appellant, it was companytended that neither s. 48 of the Act number s. 46 2 of the Indian Income Tax Act was in violation of Arts. 14, 19, 21 and 22 of the Constitution. Section 46 2 of the Indian Income Tax Act was a valid piece of legislation and under its provisions the Collector was authorized to recover the arrears of income tax as land revenue on receipt of a certificate from the Income Tax Officer. On behalf of the respondent it was companytended that these sections of the Act and the Indian Income Tax Act did offend Arts. 14, 19, 21 and 22 of the Constitution. It was further companytended that on a proper interpretation of s. 46 2 of the Indian Income Tax Act the authority given to the Collector on receipt of the certificate from the Income Tax Officer was to recover the amount of arrears of Income tax, but there was numberauthority thereunder in the Collector to arrest 1 1950 S.C.R. 88. the defaulting assessee. Even if the said section companyld be interpreted to give the power of arrest, arrest companyld only be made under s. 48 of the Act. A proper reading of s. 48 of the Act would indicate that the defaulter should be given an opportunity to be heard in his defence, previous to a warrant of arrest being issued against him, as the same companyld only issue if the Collector had reason to believe that the defaulter was wilfully withholding the arrears of tax or had been guilty of fraudulent companyduct in order to evade payment. Such a belief companyld number be entertained by the Collector without first giving the defaulter an opportunity to be heard. The warrant of arrest issued against the respondent without hearing him in his defence wag invalid and the arrest of the respondent was illegal. The learned Advocate for the respondent further drew our attention to the fact that in s. 48 there was numberprovision for the release of the defaulter if he paid up the arrears of revenue. What we have to companysider in this appeal, at the outset, is, whether either s. 48 of the Act or s. 46 2 of the Indian Income Tax Act or both offend Arts. 14, 19, 21 and 22 of the Constitution. The decisions of this Court in Gopalans case, in The State of Punjab v.Ajaib Singh 1 and in Purshottam Govindji Halai v.Shree B. B. Desai, Additional Collector of Bombay 2 are to be borne in mind in deciding this question. It was held by the majority of the learned Judges in Gopalans case that the right to move freely throughout the territory of India referred to in Art. 19 1 d of the Constitution was but one of the many attributes included in the companycept of the right to personal liberty and when a person is lawfully deprived of his personal liberty without offending Art. 21, he cannot claim to exercise any of the right guaranteed by sub-cls. a to e and g of Art. 19 1 , for those rights can only be exercised by a freeman. In that sense, therefore, Art. 19 1 d has to be read as companytrolled by the provisions of Art. 21, and the view that Art. 19 guarantees the substantive right and Art. 21 prescribes a procedural protection is incorrect. 1 1953 S.C.R. 254. 2 1955 2 S.C.R. 887. The decision in Gopalans case has been followed in this Court in a series of cases and that decision must number be taken as having settled once for all that the personal rights guaranteed by sub-cls. a to e and g Of Art. 19 1 are in a way dependent on the provisions of Art. 21 just as the right guaranteed by sub-cl. f of Art. 19 1 is subject to Art. 31. If the property itself is taken lawfully under Art. 31, the right to hold or dispose of it perishes with it and Art. 19 1 f cannot be invoked. Likewise, if life or personal liberty is taken away lawfully under Art. 21 numberquestion of the exercise of fundamental rights under Art. 19 1 a to e and g can be raised. Under Art. 21 Procedure established by law means procedure enacted by a law made by the State, that is to say, the Union Parliament or the Legislatures of the States. In the appeal before us, the principal question, therefore, is whether the respondent was deprived of his personal liberty in accordance with a procedure established by law, i.e., a valid law. If the law is valid then he has been lawfully deprived of his personal liberty and, in that situation, he cannot companyplain of the infraction of any of the fundamental rights mentioned in Art. 19 1 a to e or g . In Ajaib Singhs case, a person was taken into custody by the police and sent to the Officer-in-charge of the nearest camp under s. 4 of the Abducted Persons Recovery and Restoration Act Act LXV of 1949 and it was submitted that the said Act companytravened the provisions, inter alia, of Art. 22 of the Constitution. None of these submissions were found to be valid. It was held, so far as Art. 22 is companycerned, that the taking into custody was number arrest and detention within the meaning of Art. 22. Krishnaswami Nayudu J. in his judgment, attempted to distinguish the decision. With respect to the learned Judge the principle emerging out of the decision in Ajaib Singhs case appears to us to be clear enough. The decision did number attempt to lay down in a precise and meticulous manner the scope and ambit of the fundamental rights or to enumerate exhaustively the cases that companye within the protection of Art. 22. What was clearly laid down was that the physical restraint put upon an abducted person in the process of recovering and taking that person into custody without any allegation or accusation of any actual or suspected or apprehended companymission by that person of any offence of a criminal or quasi-criminal nature or of any act prejudicial to the State or the public interest, cannot be regarded as an arrest or detention within the meaning of Art. 22. In the present case, the arrest was number in companynection with any allegation or accusation of any actual or suspected or apprehended companymission of any offence of a criminal or quasi-criminal nature. It was really an arrest for a civil debt in the process or the mode prescribed by law for recovery of arrears of land revenue. In Purshottam Govindji Halais case, this Court held that there was numberviolation of Art. 21 of the Constitution where a person had been arrested under s. 13 of the Bombay Land Revenue Act 1876 in pursuance of a warrant of arrest issued for recovery of the demand certified under s. 46 2 of the Indian Income Tax Act, which did number offend Art. 14 of the Constitution, inasmuch as such arrest was under a procedure established by law, that is to say, s. 13 of the said Act companystituted a procedure established by law. Mr. Pocker, however, attempted to distinguish the case, because this Court was dealing with s. 13 of the Bombay Act. The grounds stated in that case for declaring that s. 46 2 of the Indian Income Tax Act was number ultra vires the Constitution, as it did number offend Art. 14, are equally applicable to the present case and we can find numbertrue principle upon which we can distinguish that case from the present one. In our opinion, having regard to the previous decisions of this Court referred to above, neither s. 48 of the Act number s. 46 2 of the Indian Income Tax Act violates Arts. 14, 19, 21 and 22 of the Constitution. We number proceed to -consider the interpretation sought to be put by Mr. Pocker on s. 46 2 of the Indian Income Tax Act and s. 48 of the Act. He companytended that s. 46 2 of the Indian Income Tax Act merely authorised the Collector to recover the amount of arrears of Income Tax, but it did number give him any authority to arrest the respondent. He submitted that the act of arrest was number a mode of recovery of the arrears of tax, but it was a punishment for failure to pay. We are unable to accept this interpretation. The authority given to the Collector by this section is to recover the arrears of tax as if it were an arrear of land revenue. The preamble of the Act clearly states that the laws relating to the companylection of the public revenue should be companysolidated and simplified and s. 5 provides for the manner in which the arrears of revenue may be recovered. It reads, Whenever revenue may be in arrear, it shall be lawful for the Collector, or other officer empowered by the Collector in that behalf, to proceed to recover the arrear, together with interest and companyts of process, by the sale of the defaulters movable and immovable property, or by execution against the person of the defaulter in manner hereinafter provided. This section clearly sets out the mode of recovery of arrears of revenue, that is to say, either by the sale of the movable or immovable property of the defaulter, or by execution against his person in the manner provided by the Act. Section 48 provides that when arrears of revenue cannot be liquidated by the sale of the property of the defaulter then the Collector, if he has reason to believe that the defaulter is wilfully withholding payment of the arrears or has been guilty of fraudulent companyduct in order to evade payment of tax, can lawfully cause the arrest and imprisonment of the defaulter. This section read with s. 5, makes it abundantly clear that the arrest of the defaulter is one of the modes, by which the arrears of revenue can be recovered, to be resorted to if the said arrears cannot be liquidated by the sale of the defaulters property. There is number a suggestion in the entire section that the arrest is by way of punishment for mere default. Before the Collector can proceed to arrest the defaulter, number merely must the companydition be satisfied that the arrears cannot be liquidated by the sale of the property of the defaulter but the Collector shall have reason to believe that the defaulter is wilfully withholding payment, or has been guilty of fraudulent companyduct in order to evade payment. When dues in the shape of money are to be realised by the procees of law and number by voluntary payment, the element of companyrcion in varying degrees must necessarily be found at all stages in the mode of recovery of the money due. The companyrcive element, perhaps in its severest form, is the act of arrest in order to make the defaulter pay his dues. When the Collector has reason to believe that withholding of payment is wilful, or that the defaulter has been guilty of fraudulent companyduct in order to evade payment, obviously, it is on the supposition that the defaulter can make the payment, but is wilfully withholding it, or is fraudulently evading payment. In the Act there are several sections e.g. ss. 16, 18 and 21 which prescribe, in unambiguous language, punishment to be inflicted for certain acts done. It is clear, therefore, that where the Act intends to impose a punishment or to create an offence, it employs a language entirely different to that to be found in s. 48. We are of the opinion, therefore, that where an arrest is made under s. 48 after companyplying with its pro- visions, the arrest is number for any offence companymitted or a punishment for defaulting in any payment. The mode of arrest is numbermore than a mode for recovery of the amount due. There is numberhing in s. 48 of the Act which requires the Collector to give the defaulter an opportunity to be heard before arresting him. It is true that the Collector must have reason to believe that the defaulter is wilfully withholding payment or has been guilty of fraudulent companyduct in order to evade payment. The Collector, therefore, must have some material upon which he bases his belief-a belief which must be rational belief-and a companyrt may look into that material in appropriate cases in order to find out if the companyditions laid down in the section have been fulfilled or number. From the affidavits filed in the High Court by the Collector and the Income Tax Officer it is quite clear that there was material upon which the Collector companyld base his belief that the respondent was wilfully withholding payment of the arrears of -tax and had been guilty of fraudulent companyduct in order to evade payment. The Collector was, therefore, justified in arresting the respondent. As pointed out by Mr. Pocker, s. 48 of the Act does number in terms provide for the release of the defaulter if he pays up the arrears, but it is to be remembered that in addition to the powers under s. 48 of the Act, the Collector has, under the proviso to s. 46 2 of the Indian Income Tax Act, similar powers to that which a Civil Court has for recovery of an amount due under a decree. It was held in Purshottam Govindji Halais case that the proviso is number an alternative remedy open to the Collector but only companyfers additional powers on the Collector for the better and more effective application of the only mode of recovery authorized by sub- see. 2 of s. 46 of the Indian Income Tax Act. Under s. 58 of the Civil Procedure Code a Civil Court must release the judgment debtor if the amount due is paid. Accordingly, the Collector has the power to release the defaulter if the amount due is paid and there is numbersubstance in the submission of the learned Advocate. Moreover, one of the companyditions precedent to action under s. 48 is the existence of arrears of revenue. On payment of the arrears, that companydition numberlonger exists and the debtor must clearly be entitled to release and freedom from arrest. It was urged that the respondent was a man of about 70 years at the time of his arrest and a Person suffering from serious ill health. Indeed, it is said, he is suffering from paralysis and that he should number be sent back to jail custody. We cannot in the present proceedings make such an order. The respondent may, if he is taken into custody again, approach the Collector for his release who companyld do so, in the circumstances set out in s. 59 of the Code of Civil Procedure, in the exercise of his powers under the proviso to s. 46 2 of the Indian Income Tax Act. The appeal is accordingly allowed with companyts and the judgment of the High Court is set aside.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 182 of 1955. Appeal from the judgment and order dated February 26, 1954, of the former Saurashtra High Court in Civil Miscellaneous Application No. 52 of 1953. Ganapathy Iyer, K. L. Hathi and B. H. Dhebar, for the appellant. C. Chatterjee, J. B. Dadachanji and Rameshwar Nath, for the respondent. 1957. September 25. The Judgment of the Court was deliv- ered by VENKATARAMA AIYAR J.-This is an appeal against the judgment and order of the High Court of Saurashtra in a writ petition filed by the respondent, setting aside an order passed by the State of Saurashtra on October 30, 1952 retiring him from service. The respondent was appointed in 1948 Memandari, that is, Superintendent of State Guest Houses, in what was the State of Junagadh when it was administered by the Government of India, and was, later on, companyfirmed in that appointment. In 1949, Junagadh became integrated into the State of Saurash- tra, and, thereafter, the services of the respondent were companytinued by that State, and he was appointed from time to time to various posts. On June 15, 1950, he was appointed Sales Tax Officer, Madhya Saurashtra, Rajkot, and was company- firmed in that post on April 16, 1952. On October 30, 1952, the Government of Saurashtra, purporting to act under Gov- ernment Resolution No. 60 of 1948 as it then stood, passed an order companypulsorily terminating his services.The respondent thereupon filed a writ application in the High companyrt of Saurashtra, challenging the validity of this order on the ground that it was made without any numberice to him of any charge of misconduct or inefficiency and without any en- quiry, and was, in companysequence in companytravention of Art. 311 2 . The learned Judges upheld this companytention, and set aside the order in question on the ground that it was, in effect, one of dismissal, and that, as there had been numberenquiry, it was illegal and void. This appeal has been preferred against their judgment and order on a certificate under Art. 133 1 c . It will be companyvenient at this stage to refer to the relevant rules bearing on the question. Rule 161 of the Bombay Civil Services Rules, which Rules had been adopted by the State of Saurashtra with some modifications, runs as follows Except as otherwise provided in the other clauses of this rule, the date of companypulsory retirement of a Government servant,, other than an inferior servant, is the date on which he attains the age of 55 years. He may be retained in service after the date of companypulsory retirement only with the previous sanction of Government, on public grounds which must be recorded in writing. It may be stated that the respondent Was number an inferior servant, and this rule was therefore applicable to him. Then, there was R. 165-A, which was in these terms A companypetent authority may remove any Government servant subject to these rules from Government service or may re- quire him to retire from it on the ground of misconduct, insolvency or inefficiency Provided that, before any such order is issued, the proce- dure referred to in Note I to rule 33 of the Bombay Civil Services, Conduct, Discipline and Appeal Rules shall be followed. Note I referred to above is as follows For the procedure to be followed before an order of dis- missal, removal or reduction in rank can be passed, see Rule 55 of the Civil Services Classification, Control and Appeal Rules, 1930, which has been reproduced in Appendix I to these Rules. The instructions issued by the Government for the guidance of officers in taking proceedings under that Rule are companytained in Appendix II to these Rules. Rule 55, referred to above, in so far as it is material, is as follows Without prejudice to the provisions of the Public Servants Inquiries Act, 1850, numberorder of dismissal, .removal or reduction shall be passed on a member, of a Service other than an order based on facts which led to his companyviction in a criminal companyrt unless he has been informed in writing of the grounds on which it is proposed to take action, and has been afforded an adequate opportuni- ty of defending himself. The grounds on which it is pro- posed to take action shall be reduced to the form of a definite charge or charges, which shall be companymunicated to the person charged together with a, statement of the allega- tions on which each charge is based and of any other circum- stances which it is proposed to take into companysideration in passing orders on the case. He shall be required, within a reasonable time, to put in a written statement of his de- fence and to state whether he desires to be heard in person. If he so desires or if the authority companycerned so directs, an oral enquiry shall be held. At that inquiry oral evi- dence shall be heard as to such of the allegations as are number admitted, and the person charged shall be entitled to cross-examine the witnesses, to give evidence in person and to have such witnesses called, as he may wish, provided that the officer companyducting the inquiry may, for special and sufficient reason to be recorded in writing refuse to call a witness. The proceedings shall companytain a sufficient record of the evidence and a statement of the findings and the grounds thereof The sum and substance of these rules is that when it is sought to remove or retire a Government servant on account of misconduct, insolvency or inefficiency before the age of superannuation which was 55 years, there must be an enquiry as provided in R. 55. The companyplaint of the respondent is that he was only 50 on October 30, 1952, and that as there was numberenquiry as required by R. 55, the order of retirement is illegal. Rule No. 165-A, however, was amended by the Saurashtra Government on September 28, 1950, and again on January 15, 1952, and on the relevant date, the rule, as amended and omitting what is number material, stood as follows Government is pleased to direct that the proviso and the Note to Bombay Civil Services Rule 165-A shall number apply to the servants of this Government. Govern- ment is further pleased to issue the following orders which shall be made applicable to such servants Government retains an absolute right to retire any Govern- ment servant after he has companypleted 25 years qualifying service or 50 years of age, whatever the service without giving any reason, and numberclaim to special companypensation on this account will be entertained. This right will number be exercised except when it is in the public interest to dis- pense with the further services of a Government servant such as on account of inefficiency or dishonesty. Thus the rule is intended for use Against a Government servant whose efficiency is impaired but, against whom it is number desirable to make formal charges of inefficiency or against one who has ceased to be fully efficient i.e., when a Government servants value is clear- ly incommensurate with the pay which he draws but number to such a degree as to warrant his retirement on a companypassion- ate allowance and in case where companyruption is clearly established even though numberspecific instance is likely to be proved under the Bombay Civil Services Conduct, Discipline and Appeal Rules. Under this rule, the Government had the power to terminate the services of an officer without assigning any reason, if he had companypleted 25 years of service or attained the age of It was under this rule that the order was statedly made on October 30, 1952, and as the respondent had companypleted the age of 50 on that date, the order would be within the scope of the authority companyferred on the State by that rule, and must be upheld, unless the rule itself is held to be ultra Vires. Now, the stand taken by the respondent in the Court below was that an order retiring an officer before the age of superannuation was in substance one of dismissal or removal and must, in order to be valid, satisfy the requirements of Art. 311 2 , and that R. 165-A, in so far as it authorised the Government to terminate the service without any reason and without any enquiry was repugnant to Art. 311 2 , and was therefore ultra vires. This companytention found favour with the learned Judges in the Court below. Since the above decision was given, the question whether an order of companypulsory retirement was one of dismissal or removal within Art. 311 2 came up for companysideration in this Court in Shyam Lal v. The State of Uttar Pradesh 1 , and it was held that such an order did number amount to one of dis- missal or removal within the meaning of that Article, and was number protected by it. If this decision applies to the present case-and it is the companytention of the appellant that it does-then there can be numberquestion but that the order dated October 30, 1952, is valid, and that this appeal must succeed. Mr. N. C. Chatterjee for the respondent companytends that that decision does number govern the present appeal, and his argument in support of this companytention may thus be stated The rule as to companypulsory retirement embodied in Note I to art. 465-A, which was companysidered in Shyam Lals case 1 , was in these terms Government retains an absolute right to retire any officer after he has companypleted twenty-five years qualifying service without giving any reasons, and numberclaim to special companypen- sation on this account will be entertained. Rule 165-A differs from the above rule in a material partic- ular, in that after incorporating the above rule, it pro- ceeds on to state that the right Will number be exercised except on grounds of inefficiency or dishonesty. An order of retirement under Note I to art. 465-A carries with it numberstigma and numberimputation against the character or the abili- ty of the officer, whose services are terminated. But where the termination is, under R. 165-A, it must reflect on the efficiency or the capacity of the officer, and where a persons services are terminated before the age of superan- nuation on grounds of inefficiency or dishonesty, that companyld be regarded only as dismissal or removal. 1 1953 i S.C.R.26. Support for this argument was sought in the following obser- vations in Shyam Lals case 1 , at p. 41 There can be numberdoubt that removal-I amusing the term synonymously with dismissal-generally implies that the officer is regarded as in some manner blameworthy or defi- cient, that is to say, that he has been guilty of some misconduct or is lacking in ability or capacity or the will to discharge his duties as he should do. The action of removal taken against him in such circumstances is thus founded and justified on some ground personal to the offi- cer. Such grounds, therefore, involve the levelling of some imputation or charge against the officer which may companyceiva- bly be companytroverted or explained by the officer. There is numbersuch element of charge or imputation in the. case of companypulsory retirement It is true that this power-of companypulsory retirement may be used when the authority exer- cising this power cannot substantiate the misconduct which may be the real cause for taking the action but what is important to numbere is that the directions in the last sen- tence in Note I to article 465-A make it abundantly clear that an imputation or charge is number in terms made a companydi- tion for the exercise of the power. In other words, a companypulsory retirement has numberstigma or implication of misbe- haviour or incapacity. It was argued that the principle to be deduced from these observations was that where the retirement involved a stigma or imputation of misconduct or incapacity, then it must be treated as dismissal, and that, on that principle, an order of retirement under R. 165-A must be held to be one of dismissal or removal. This argument proceeds -on a misconception as to what was decided in Shyam Lals case 1 . There, the point for determination was simply whether an order of retirement was one of dismissal or removal falling within the purview of Art. 311 2 , and it was held that it was number. The ratio decidendi of that decision is this Under the rules, an order of dismissal is a punishment laid on a Government servant, when it is found that he 1 1955 i S.C.R. 26. has been guilty of misconduct or inefficiency or the like, and it is penal in character, because it involves loss of pension which under the rules would have accrued in respect of the service already put in. An order of removal also stands on the same footing as an order of dismissal, and involves the same companysequences, the only difference between them being that while a servant who is dismissed is number eligible for re-appointment, one who is removed is. An order of retirement differs both from an order of dismissal and an order of removal, in that it is number a form of punish- ment prescribed by the rules, and involves numberpenal companyse- quences, inasmuch as the person retired is entitled to pension proportionate to the period of service standing to his credit. Now, the policy underlying Art. 311 2 is that when it is proposed to take action against a servant by way of punish- ment and that will entail forfeiture of benefits already earned by him, he should be heard and given an opportunity to show cause against the order. But that companysideration can have numberapplication where the order is number one of punishment and results in numberloss of benefits already accrued, and in such a case, there is numberreason why the terms of employment and the rules of service should number be given effect to. Thus, the real criterion for deciding whether an order terminating the services of a servant is one of dismissal or removal is to ascertain whether it involves any loss of benefits previously earned. Applying this test, an order under R. 165-A cannot be held to be one of dismissal or removal, as it does number entail forfeiture of the proportion- ate pension due for past services. Does it make any difference in the position, as is companytended by the respondent, that R. 165-A provides, unlike Note I to art. 465-A in Shyam Lals case 1 that the power is number to be exercised except in cases of misconduct or inefficiency ? When the Government decides to retire a servant before the age of superannuation, it does so for some good reason, and that, in general would be misconduct or inefficiency. Indeed, in Shyam Lals case 1 , the Government did give to the 1 1955 i S.C.R. 26. officer companycerned, numberice of charges of misconduct and inefficiency and called for his explanation, though a formal enquiry was number held. In providing that numberaction would be taken except in case of misconduct or inefficiency, R. 165-A only made explicit what was implicit in Note I to art. 465- The fact to be numbered is that while misconduct and inef- ficiency are factors that enter into the account where the order is one of dismissal or removal or of retirement, there is this difference that while in the case of retirement they merely furnish the background and the enquiry, if held-and there is numberduty to hold an enquiry-is only for the satis- faction of the authorities who have to take action, in the case of dismissal or removal, they form the very basis on which the order is made and the enquiry thereon must be formal, and must satisfy the rules of natural justice and the requirements of Art. 311 2 . It should be added that questions of the above character companyld arise only when the rules fix both an age of superannuation and an age for companypulsory retirement and the services of a civil servant are terminated between these two points of time. But where there is numberrule fixing the age of companypulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dis- missal or removal within Art. 311 2 . Now, the provision in R. 165-A on which the respondent relies does number, on its true companystruction, impose any fetter on the power previously companyferred on the State in terms absolute, to terminate the services of its servant without assigning any reason. It is really in the nature of depart- mental instructions to be followed when action is proposed to be taken under, that rule, and makes it clear that the enquiry into the charges is only for the satisfaction of the authorities. We are accordingly of opinion that R. 165-A is Dot violative of Art. 311 2 and is intra vires, and that the impugned order dated October 30, 1952, passed in exer- cise of the power companyferred thereby is valid. A companytention was also raised for the respondent that under the rules of service in force in the State of Junagadh, the age of superannuation was 60, that art. XVI of the Instrument of Accession provided that the permanent members of the public services in the several States should be companytinued on companyditions number less advantageous than those on which they were holding office at the date of accession, and that under this Covenant, the respondent was entitled to companytinue until he attained the age of 60. The decision in Bholanath J. Thaker v. State of Saurashtra 1 was relied on in support of this position. But numbersuch, claim was put forward in the writ petition, and it is number too late to raise it. In the result, the appeal is allowed, the order of the lower Court is set aside, and the petition of the respondent is dismissed.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 93 of 1956. Appeal by special leave from the judgment and order dated the April 14, 1955, of the Bombay High Court in Criminal Appeal No. 156 of 1955 and Criminal Revision Application No. 435 of 1955 arising out of Judgment dated the January 3,1955, of the Court of the Additional Chief Presidency Magistrate, Bombay, in Case No. 9/p of 1954. Purshottam Tricumdas, J. B. Dadachanji, S. N. Andley and Rameshwar Nath, for the appellant. K. Daphtary, Solicitor-General of India, Porus Mehta and R. H. Dhebar, for the respondent. 1957. February 12. The Judgment of the Court was delivered by BHAGWATI J.-This appeal with special leave under Art. 136 of the Constitution raises the question whether the High Denomination Bank Notes Demonetisation Ordinance, 1946 Ordinance No. III of 1946 promulgated by the Governor- General of India on January 12, 1946, was in operation on July 11, 1953, when the offence under s. 7 read with s. 4 thereof was companymitted by the appellant herein. The appellant who was the accused No. 1 before the Additional Chief Presidency Magistrates Court, Bombay, was charged along with the accused Nos. 2, 3, 5 and 6 with having on or about July II, 1953, transferred by sale 10 High Denomination Bank Notes of the Denomination of Rs. 1,000 each to one Velji Lakhamshi Joshi for Rs. 1,800 at the rate of Rs. 180 per numbere and thus companytravened the provisions of s. 4 of the Ordinance and companymitted an offence punishable under s. 7 of the Ordinance read with s. 109 of the Indian Penal Code. A preliminary objection was urged by the learned companynsel for the appellant that the said Ordinance was number in operation at the date when the offence was alleged to have been companymitted and that therefore the prosecution was number maintainable. This objection was overruled by the learned Presidency Magistrate and the trial ended in the companyviction of the appellant along with the companyaccused of the offence with which they had been charged. The appellant was sentenced to pay a fine of Rs. 8,000 and in default suffer six months rigorous imprisonment and the companyaccused of the appellant were awarded varying sentences of fine with which however we are number companycerned. The appellant took an appeal to the High Court of Judicature at Bombay being Criminal Appeal No. 156 of 1955. The State of Bombay, the respondent herein, also filed an application for enhancement of the sentence, being Criminal Revision Application No. 435 of 1955. The company accused of the appellant had also filed appeals against their companyvictions and sentences of fine imposed upon them and all these appeals and the application of the respondent were heard together by a Division, Bench of the High Court. The High Court agreed with the learned Presidency Magistrate in regard to the finding of fact and held that the appellant had in fact transferred by sale 10 High Denomination Bank Notes of Rs. 1,000 each to the possession of Velji Lakhamshi and his act fell within the prohibition enacted in s. 4 of the Ordinance. The High Court also overruled the companytentions which were urged before it in regard to the Ordinance having lapsed and ceased to be in operation before July 11, 1953, the date on which the offence was alleged to have been companymitted. It accordingly companyfirmed the companyviction recorded against the appellant by the learned Additional Chief Presidency Magistrate. In regard to the sentence the High Court saw numberground for enhancing the same and companyfirmed the sentence of fine of Rs. 8,000 and in default six months rigorous imprisonment which had been awarded by the learned Presidency Magistrate to the appellant. The appellant applied to the High Court for a certificate under Art. 134 1 c of the Constitution. The said application was however dismissed by the High Court with the result that he applied for and obtained from this Court special leave under Art. 136 of the Constitution. The decision of this appeal turns on the companystruction of s. 72 of the 9th Sch. of the Government of India Act, 1935 25 and 26 Geo. 5 ch. 42 and s. 1 3 of the India and Burma Emergency Provisions Act, 1940 3 and 4 Geo. 6 ch. 33 . Section 72 of the 9th sch. of the Government of India Act, 1935, read as follows The Governor-General may, in cases of emergency, make and promulgate ordinances for the peace and good Government of British India or any part thereof, and any ordinance so made shall, for the space of number more than six months from its promulgation, have the like force of law as an Act passed by the Indian Legislature but the power of making ordinances under this section is subject to the like restrictions as the power of the Indian Legislature to make laws and any ordinance made under this section is subject to the like disallowance as an Act passed by the Indian Legislature, and may be companytrolled or ,superseded by any such Acts. Section 1 3 of the India and Burma Emergency Provisions Act, 1940, ran as under Section seventy-two of the Government of India Act, which, as set out in the Ninth Schedule to the Government of India Act, 1935, companyfers on the Governor-General power to make Ordinances in cases of emergency shall, as respects Ordinances made during the period specified in section three of this Act, have effect as if the words for the space of number more than six months from its promulgation were omitted and, numberwithstanding the provision in the said section seventy-two that the power of making Ordinances thereunder is subject to the like restrictions as the power of the Indian Legislature to make laws- Ordinances may, during the said period, be made under that section affecting the Army Act, the Air Force Act, or the Naval Discipline Act and Section one hundred and eleven of the Government of India Act, 1935 which exempts certain British subjects from certain Indian Laws shall number apply to any ordinance made under the said section seventy-two during that period. Section 3 referred to hereinabove -was in the terms following The period referred to in the preceding sections is the period beginning with the date of the passing of this Act and ending with such date as His Majesty may by Order in Council declare to be the end of the emergency which was the occasion of the passing of this Act. The India and Burma Emergency Provisions Act, 1940, was passed on June 27, 1940 , and was an Act to make emergency provisions with respect to Government of India and Burma. On April 1, 1946, was published in the Gazette of India Extraordinary His Majestys Order in Council called The India and Burma Termination of Emergency Order, 1946 . By the said order the period of emergency referred to in s. 3 of the India and Burma Emergency Provisions Act, 1940, was declared to have ended on April 1, 1946. The period specified in s. 3 of the said Act thus extended from June 27, 1940, to April 1, 1946. The Ordinance in question was promulgated on January 12, 1946, and was therefore within the said period. The argument which was addressed before us by the learned companynsel for the appellant based on these provisions was a that as soon as the declaration that the emergency was at an end was made on April 1, 1946, the original position was restored and the Ordinance in question which had been promulgated in exercise of the emergency powers ipso facto lapsed when the emergency was declared to have ended, b that, in the alternative, s. 72. of the 9th Sch. of the Government of India Act, 1935, having been thus restored with effect from April 1, 1946, one must look to its terms as they originally stood to justify the companytinuance of the ordinance in question after April 1, 1946, whensoever it may have been promulgated. It will be useful at this stage to see what was the scheme provided in the Government of India Act, 1935, for enacting legislative measures. It may be numbered that the Act envisaged the establishment of the Federation of India. Part II, ch. 3 provided for the companystitution of the Federal Legislature which was to companysist of two chambers known respectively as the Council of States and the House of Assembly. The numbermal legislative procedure required a bill to be passed by both the Chambers of the Federal Legislature and assented to by the Governor-General. There was a distribution of legislative powers between the Federal Legislature and the Provincial Legislatures and the Federal Legislature was invested with the power to make laws for. the whole or any part of British India or for any Federated State with respect to any of the matters enumerated in the Federal Legislative List and any of the matters enumerated in the Concurrent Legislative List. Power was however given, to the Federal Legislature, if the Governor- General in his discretion declared by a Proclamation of Emergency that a grave emergency existed whereby the security of India was threatened, whether by war or internal disturbance, to make laws for a Province or any part thereof with respect to any of the matters enumerated in the Provincial Legislative List These were the powers of the Federal Legislature to enact legislative measures. The Governor-General was, however, companyferred certain legislative powers in Part II, ch. 4. Power was companyferred upon him to promulgate Ordinances if at any time when the Federal Legislature was number in session he was satisfied that circumstances existed which rendered it necessary for him to take immediate action. Ordinances thus promulgated were to have the same force and effect as Acts of the Federal Legislature assented to by the Governor-General. But every such Ordinance would cease to operate at the expiration of six months from the re-assembly of the Legislature. Similar power was companyferred upon the Governor-General to promulgate Ordinances if at any time he was satisfied that circumstances existed which rendered it necessary for him to take immediate action for the purpose of enabling him satisfactorily to discharge his functions in so far as he was required in the exercise thereof to act in his discretion or to exercise his individual judgment. Such Ordinances also were to have the same force and effect as the Acts of the Federal Legislature assented to by the Governor-General and were to companytinue in operation for such period number exceeding six months as may be specified therein but companyld by subsequent Ordinances be extended for a further period number exceeding six months. Power was also companyferred upon the Governor-General if at any time it appeared to him that for the purpose of enabling him satisfactorily to discharge his functions in so far as he was required in the exercise thereof to act in his discretion or, to exercise his individual judgment it was essential that provision should be made by legislation, to enact SUPREME COURT REPORTS 641 Governor-Generals Acts which when enacted were to have the same force and effect as Acts of the Federal Legislature assented to by the Governor-General. These were the special legislative powers companyferred upon the Governor-General which companyld be exercised by him when the numbermal legislative procedure companyld number be resorted to. It is worthy of numbere however that howsoever and under whatever circumstances the legislative powers vested in the Governor-General were exercised by him, the Governor-Generals Acts thus enacted and the Ordinances thus promulgated were equated with the Acts of the Federal Legislature assented to by the Governor- General. Part XIII enacted Transitional Provisions. A period of time was bound to elapse between the companymencement of Part III of the Act which related to the Governors Provinces and the establishment of the Federation and s. 317 of the Act companytinued in force certain provisions of the Government of India Act with amendments companysequential on the provisions of the Act set out in the 9th Sch. thereof until the estab- lishment of the Federation. Section 72 above quoted formed part of the 9th Sch. under the caption Indian Legislature and companyferred upon the Governor-General power to make and promulgate Ordinances for the peace and good Government of British India or any part thereof in cases of emergency. Ordinances thus promulgated by the Governor-General in exercise of the power thus companyferred upon him were to companytinue in operation for the space of number more than six months from the date of their promulgation and were to have the like force of law as Acts passed by the Indian Legislature. They were also equated with the. Acts passed by the Indian Legislature by having resort to the numbermal legislative procedure set out in the Government of India Act. Even though the Governor-Generals Acts and the Ordinances promulgated by him were thus equated with the Acts passed by the Federal Legislature or the Indian Legislature as the case may be, the period of duration thereof had to be determined. Every statute for which numbertime is limited is 642 SUPREME COURT REPORTS 1957 called a perpetual Act, and its duration is prima facie perpetual. It companytinues in force until it is repealed. Vide Craies on Statute Law, 5th Ed. p. 374 Halsburys Laws of England, Hailsham Ed., Vol. XXXI, p. 511, para. 664 . If an Act companytains a proviso that it is to companytinue in force only for a certain specified time, it is called a Temporary Act. This result would follow number only from the terms of the Act itself but also from the fact that it was intended only as a temporary measure. This ratio has also been applied to emergency measures which companytinue during the subsistence of the emergency but lapse with the cessation thereof. It was therefore companytended that Ordinances promulgated under the emergency powers vested in the Governor-General would be in operation during the period of emergency but would cease to be in operation once the emergency was declared to have ended. In the instant case before us the Ordinance in question was promulgated in exercise of the emergency powers vested in the Governor- General under s. 72 of the 9th Sch. of the Government of India Act, 1935, and it was urged that the Ordinance thus promulgated would cease to be in operation after the emergency was declared to have ended on April 1, 1946, by the India and Burma Termination of Emergency Order, 1946, in spite of the words of limitation for the space of number more than six months from its promulgation having been omitted from s. 72 by s. 1 3 of the India and Burma Emergency Provisions Act, 1940. Reliance was placed in support of this companytention on the observations of Vardachariar C. J. in King Emperor v. Benoari Lall Sharma and others 1 Legislation by Ordinance has numberdoubt been given the same effect as ordinary legislation and the ambit as to the subject-matter is the same in both cases. But there are two fundamental points of difference which have a material bearing on the present question One is that by the very terms of s.72 of the Ninth Schedule to the Constitution Act, the operation of the Ordinance is limited to a period of 1 1943 F.C.R. 96, 137. six months and even number it is only temporary, though the particular limit has been removed , and secondly, it is avowedly the exercise of a special power intended to meet an emergency. Zafrulla Khan J. also had expressed himself to the same effect in King Emperor v. Sibnath Banerjee 1 The legislature can at any time enact a measure and such measure can remain in force without any limit of time but the exercise of the Ordinance-making power is limited in two ways 1 by the limitation as to the circumstances in which it can be exercised, and ii by the limitation as to the time during which any measure so enacted can remain in operation. The existence of an emergency is a companydition precedent to the exercise of the power. The fact that the Court cannot go behind a declaration of emergency made by the Ordinance-making authority cannot affect this question. The power was intended to be availed of and companyld be availed of only in an emergency, whereas ordinary legislation is number governed by any such limitation. Similarly, an Ordinance is necessarily of limited duration, whether under s. 72 or under the terms of the India and Burma Emergency Provisions Act of 1940. An argument was accordingly addressed before us that even though the Ordinance in question had been promulgated during the period specified in a. 3 of the India and Burma Emergency Provisions Act, 1940, viz., between June 27, 1940, and April 1, 1946, and s. 72 of the 9th Sch. of the Government of India Act, 1935, was to be read with the omission of the words for the space of number more than six months from its promulgation therefrom, the effect of such omission was number to companytinue the duration of the Ordinance in question in any event beyond April 1, 1946. The Ordinance lapsed or ceased to be in operation on the, declaration having been made on April 1, 1946, that the emergency had ended. This argument however ignores the fact that whatever Governor-Generals Acts were enacted or 1 1944 F.C.R. 1, 12. Ordinances promulgated by him in exercise of his special legislative powers or in exercise of the emergency power companyferred upon him by s. 72 of the 9th Sch. of the Government of India Act, 1935, were all equated with the Acts of the Federal Legislature or the Indian Legislature, as the case may be, assented to by the Governor-General. If there was a limitation to be found in the Acts or the Ordinances themselves in regard to the duration thereof the same was to prevail. But if numbertime was limited in the enactment itself for its duration it was to companytinue in force until it was repealed. If by the operation of s. 1 3 of the India and Burma Emergency Provisions Act, 1940, the words for the space of number more than six months from its promulgation were omitted from s. 72 during the period specified in s. 3 of that Act, viz., June 27,1940 to April 1, 1946, there was numberlimitation of the period of duration of the Ordinance in question and the Ordinance having the like force of law as an Act passed by the Indian Legislature without any limitation on its duration was to companytinue in force until it was repealed. The emergency under which the Governor-General was invested with the power to make and promulgate Ordinances for the peace and good government of British India or any part thereof under s. 72 was the companydition of the exercise of such power, by the Governor- General and did number impose any limitation on the duration of the Ordinances thus promulgated. For determining the duration of such Ordinances one had to look to the substantive provisions of s. 72 which in terms enacted and laid down the limitation of number more than six months from its promulgation on the life of the Ordinance. If these words had number been omitted by s. 1 3 of the India and Burma Emergency Provisions Act, 1940, the Ordinances thus promulgated -would have been of a duration of number more than six months from their promulgation. Once these words were omitted by a. 1 3 of the India and Burma Emergency Provisions Act, 1940, s. 72 of the 9th Sch. of the Government of India Act, 1935, would read as under- The Governor-General may, in cases of emergency, make and promulgate ordinances for the peace and good government of British India or any part thereof and any ordinance so made shall have the like force of law as an Act passed by the Indian Legislature but the power of making ordinances under this section is subject to the like restrictions as the power of the Indian Legislature to make laws and the like disallowance as an Act passed by the Indian Legislature, and may be companytrolled or superseded by any such Act. The effect of the deletion of these words from s. 72 leaving the section to be read as above had the necessary effect of equating the Ordinances which were promulgated between June 27, 1940, and April 1, 1946, with Acts passed by the Indian Legislature without any limitation of time as regards their duration. Ordinances thus promulgated were perpetual in duration and companytinued in force until they were repealed. This position was companysidered by the Federal Court in J. K. Gas Plant Manufacturing Co., Rampur Ltd. and others v. King Emperor 1 where Spens C. J. observed- These Ordinances were made under the powers companyferred on the Governor-General by s. 72 of the Ninth Schedule to the Constitution Act, as amended by the India and Burma Emergency Provisions Act, 1940 3 4 Geo. 6, Ch. 33 . Under the said s. 72, as it originally stood, Ordinances were limited to an effective life of six months only from the date of promulgation. Sub-section 3 of s. I of the said Act, however, provided that in respect of Ordinances made under s. 72 during the period specified in s. 3 of the Act, s. 72 should have effect as if the words ,for the space of number more than six months from its promulgation were omitted. The period specified in s. 3 of the Act is the period beginning with the date of the passing of this Act and ending with such date as His Majesty may by Order in Council declare to be the end of the emergency which was the occasion of the passing of this Act. The date of the passing of the 1 1947 F.C.R. 141, 161. said Act was the 27th June, 1940, and the emergency was number numberified to have companye to an end on the 1st April, 1946. It was companytended on behalf of the appellants that the true companystruction to be given to s. 72 as so amended was in effect to substitute in s. 72 in respect of the duration of an Ordinance, -the period specified in s. 3 of the Act for the original six months period and that accordingly on the expiration of that period, viz., on the 1st April, 1946, Ordinances made after the passing of the Act automatically came to an end. It was number made very clear how one companyld arrive at such a companystruction. It appears to be based on the suggestion that the power to promulgate an Ordinance under s. 72 was by the section companyfined to the existence of an emergency, Cf the words in the sub-section in cases of emergency , and that the Act was intituled an Act to make emergency provision with respect to the Government of India and Burma and defined the period of emergency. Unless therefore the companystruction companytended for by the appellants was accepted numberperiod would be provided for the companytinuance of these Ordinances, and that companyld number have been the intention of the legislature, as the ordinance-making power of the Governor-General was recognised as temporary only. In our opinion, the emergency on the happening of which an Ordinance can be promulgated is separate and distinct from and must number be companyfused with the, emergency which occasioned the pawing of the Act and the clear effect of the words of the, Act on s. 72 is that Ordinances promulgated under that subsection during the period specified in s. 3 of the Act are subject to numbertime limit as regards their existence and validity, unless imposed by the Ordinances themselves, or other amending or repealing legislation, whether by Ordinance or other. wise. In our judgment, it is clear that the second Lahore Tribunal did number cease to exist or to have jurisdiction in the case under appeal by reason of the expiration on the 1st April, 1946, of the period specified in s. 3 of the Act in question. In our opinion, the above observations of Spens C. J. enunciate the companyrect position. The Ordinance in question having been promulgated during the period between June 27, 1940, and April 1, 1946, was perpetual in duration and companytinued in force until it was repealed. Our attention has number been drawn to any subsequent Ordinance or Act of the Indian Legislature amending or repealing the said Ordinance with the result that it companytinues to be in force and was in operation on July 11, 1953, the date on which the offence in question was companymitted by the appellant. This position was recognized in the Adaptation of Laws Order, 1950, issued under -the Constitution Of India. In the Second Schedule to the said Order were companytained several Central Ordinances enacted between 1940 and 1946 including the High Denomination Bank Notes Demonetisation Ordinance, 1946 Ordinance No. III of 1946 where in s II thereof the words Part A States and Part C States were to be sub- stituted for the provinces. It is number necessary to refer to the other Ordinances appearing in this companypilation but suffice it to say that in respect of all the Ordinances which were thus promulgated by the Governor-General in exercise of the power companyferred upon him under s. 72 of the 9th Sch. of the Government of India Act, 1935, the companytinuance thereof even after April 1, 1946, was predicated and the adaptations prescribed in the Adaptation of Laws Order, 1950, issued under the Constitution of India were made applicable thereto. This position is further supported by referring to the relevant provisions of the Reserve Bank of India Act, 1934 II of 1934 . Section 26 of that Act provided ill 1 Subject to the provisions of sub-section 2 , every bank numbere shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government. On recommendation of the Central Board the Central Government may, by numberification in the Gazette of India, declare that, with effect from such date as -may be specified in the numberification, any series of bank numberes of any denomination, shall cease to be legal tender save at such office or a agency of the bank and to such extent as may be specified in the numberification. Under s. 1 2 of the Act as it stood, the Act extended to whole of India excepting the State of Jammu and Kashmir. The High Denomination Bank Notes Demonetisation Ordinance, 1946 Ordinance No. III of 1946 declared that Denomination Notes of the denominational value of Rs. 500, Rs. 1,000 or Rs. 10,000 ceased to be legal tender in payment or on account at any place in British India on the expiry of January 12, 1946. The Ordinance having companytinued in operation even after the declaration of the emergency having companye to an end was made on April 1, 1946, the said numberes companytinued to be ineffective as legal tender in India, though the position in Jammu and Kashmir in regard to the same companyld number be affected by reason of the Reserve Bank of India Act, 1934, number having been made applicable to the State of Jammu and Kashmir as stated above. On September 25, 1956, however, the Jammu and Kashmir Extension of Laws Act, 1956 LXII of 1956 being an Act to provide for the extension of certain laws to the State of Jammu and Kashmir was passed by the Parliament. In the Schedule to that Act was companytained the Reserve Bank of India Act, 1934 II of 1934 . The words except the State of Jammu and Kashmir were omitted from s. 1, sub-s. 2 and s. 26A was added after s. 26 of the Act. Section 26A provides- ,, Notwithstanding anything companytained in section 26, numberbank numbere of the denominational value of five hundred rupees, one thousand rupees or ten thousand rupees issued before the 13th day of January, 1946, shall be legal tender in payment or on account for the -amount expressed therein. The law in the State of Jammu and Kashmir with regard to these High Denomination Bank Notes issued before January 13, 1946, was thus brought into line with the law as it obtained in the rest of India. This would certainly have number been done but for the acceptance of the position that the Ordinance in question companytinued in operation even after April 1, 1946, and was in operation right throughout even after April 1, 1946. The alternative argument addressed before us by the learned companynsel for the appellant need number detain us at all, for the simple reason that reading s. 72 in the manner suggested would be tantamount to giving a retrospective effect to the section as it originally stood in regard to Ordinances which had been promulgated between June 27, 1940, and April 1, 1946. There is numberhing to justify such retrospective operation. As regards such Ordinances the period of their duration had to be determined having regard to the provisions of s. 72 as they stood with the omission of the words for the space of number more than six months from its promulgation therefrom during tHe period specified in s. 3 of the India and Burma Emergency Provisions Act, 1940, and the Ordinance in question was therefore number limited to the space of number more than six months from the date of its promulgation but was perpetual in its duration with the result that it companytinues in operation until it is repealed. There is numberwarrant for reading the provisions of s. 72 with the omitted words restored to their original position after April 1, 1946, while determining the duration of the Ordinances which had been promulgated between June 27, 1940, and April 1, 1946. Both the companytentions urged by the learned companynsel for the appellant before us having thus failed, it follows that the High Denomination Bank Notes Demonetization Ordinance, 1946 Ordinance No. III of 1946 was in operation on July 11, 1953, the date on which the offence was companymitted by the appellant and the appellant was rightly companyvicted by both the companyrts below.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 179 of 1954. Appeal from the judgment and order dated March 12, 1953, of the Bombay High Court in Income-tax Reference No. 43 of 1952. K. Daphtary, Solicitor-General of India, G. N. Joshi and B. H. Dhebar, for the appellant. A. Palkhivala, D. H. Dwarkadas, J. B. Dadachanji, S. N. Andley and Rameshwar Nath, for the respondent. 1957. May 15. The Judgment of the Court was delivered by K. DAS J.-This is an appeal on a certificate granted by the High Court of Judicature at Bombay under sub-s. 2 of s. 66A of the Indian Income-tax Act hereinafter referred to as the Act . The appellant is the Commissioner of Income- tax, Bombay, and the respondent is the Provident Investment Co., Ltd., Bombay, hereinafter referred to as the assesses companypany. The short question which falls for companysideration in this appeal is whether a particular transaction, details 1143 whereof we shall presently state, entered into by the assessee companypany in 1946 resulted in capital gains within the meaning of s. 12B of the Act. The question which was referred to the High Court under s. 66 1 of the Act was this Whether the assessee companypany made a capital gain amounting to Rs. 81,81,900 within the meaning of s. 12B of the Indian Income-tax Act? The High Court answered the question in the negative. The appellant being dissatisfied with the judgment and order of the High Court asked for and obtained a certificate from the said High Court that the case is a fit one for appeal to the Supreme Court. The material facts may be very shortly stated. The assessee companypany is a private limited companypany, the shares of which were held by the then Maharaja Scindia of Gwalior and his numberinees. At the material time, the assessee companypany was the managing agent of Madhowji Dharamsi Manufacturing Co., Ltd., hereinafter briefly referred to as the Dharamsi Company, and Sir Shapurji Broacha Mills Ltd., briefly referred to as the Shapurji Broacha Company. The assessee companypany held all the companyversion shares of the Dharamsi Company and a substantial majority of the companyversion shares of the Shapurji Broacha Company. The Dalmia Investment Company Limited, which will hereinafter be briefly referred to as the Dalmia Company, wrote two letters to the assessee companypany on September 14, 1946. In these two letters, the Dalmia Company offered to purchase 28,328 companyversion shares of the Dharamsi Company at Rs. 500 per share together with the managing agency, and also 75,212 companyversion shares of the Shapurji Broacha Company, together with the managing agency. We are number companycerned with the other details mentioned in the two letters, except this that the Dalmia Company made it clear that it would purchase both the mills or neither, and a time limit till September 23, 1946, 3 p. m. was imposed during which the offer would remain open. This time limit was, however, extended later up to September 30, 1946. The letter further stated 1144 On your accepting the offer, we will pay to you Rs. 20 lakhs in the case of the Dharamsi Company, Rs. 30 lakhs in the case of the Shapurji Broacha Company as and by way. of earnest money. You shall have to arrange to get the transfer of the managing agency sanctioned by the general body of the shareholders within a period of 40 days from the date of acceptance. As Boon as the transfer is sanctioned, we will pay the balance of the purchase price. On September 26, 1946, there was a meeting of the Board of Directors of the assessee companypany. At that meeting, the Board companysidered the offers made by the Dalmia Company and resolved to accept the offers. The Board further stated in its minutes that out of the total amount received from the sale of the shares, a sum of Rs. 1 crore should be paid to the assessee companypany as companypensation for the loss of the managing agency of the two mills. On September 30, 1946, the assessee companypany wrote to the Dalmia Company accepting the offers made, subject to a companydition which is number material for our purpose. On the same date, the Dalmia Company received the acceptance of the offers made by it and sent two drafts, one for Rs. 20 lakhs and the other for Rs. 30 lakhs. On October 7, 1946, the Dalmia Company wrote a very important letter to the assessee companypany. This letter said inter alia With reference to the interview our Solicitor Mr. Tanubhai had with your Mr. Wadia, we beg to record that it is number being agreed upon as follows in modification of the arrangement previously made between yourselves and ourselves In our letters of offer which have been accepted by you, it was arranged that the managing agency will be transferred either to us or to our numberinees. Now, instead of doing so by you, you as the present managing agents will give their sic resignation, so that at the time of delivery of the shares and payment of moneys, your managing agency will have companye to an end. In view of the above, it is number necessary to obtain any sanction of general meeting. 1145 2 1. Mr. Shriyans Prasad Jain Mr. Jaidayal Dalmia Mr. Shanti Prasad Jain and Mr. Vishnu Hari Dalmia will be appointed Directors of both the Mills Companies and thereafter all the present directors will tender their resignation. Qualification shares in the names of the above proposed Directors will be transferred by you and the balance of the shares will be delivered to us along with the transfer deeds duly signed against payment. You may companymunicate by a circular to the shareholders that you have resigned the managing agency. You may further mention in the circular that in accordance with the offer we are prepared to take up the deferred shares held by the shareholders which may be offered to us at the rate of Rs. 25 and Rs. 7-8-0 of Madhowji Dharamsi Manufacturing Co. Ltd. and Sir Shapurji Broacha Mills Ltd. Mills respectively within two months of the date of letter of offer which we would also send. The assessee companypany accepted the modified arrangement suggested by the Dalmia Company, and on October 19, 1946, the assessee companypany wrote to the Dharamsi Company and the Shapurji Broacha Company that it had decided to resign the office of the managing agency and accordingly tendered its resignation on that date. The balance of the companysideration money was then paid to the assessee companypany, and it was number disputed that the. value of the managing agency was companyputed at Rs. 1 crore, number was there any dispute that the managing agency was a capital asset. Out of the said sum of Rs. 1 crore, the Income-tax Officer companyputed the capital gains at Rs. 81,81,900 and asked the assessee companypany to pay tax thereon. The Appellate Assistant Commissioner held that the assessee companypany had sold the managing agency and therefore the profits or gains arising from that sale were capital gains within the meaning of s. 12B of the Act. The Income- tax Appellate Tribunal, Bombay Bench A, held, however, that there was numbersale of the managing agency, because the original companytract of 1146 purchase was varied by the new companytract embodied in the letter of October 7, 1946. The Tribunal, however, held as follows The assessee companypany was the owner of the shares and the managing agencies. It sold the shares to the Dalmia Co. and handed back the managing agencies to the managed companypanies. This handing back, in our opinion, companystitutes a transfer of the managing agencies. On that footing the Tribunal held that s. 12B of the Act applied. On an application by the assessee companypany, the Tribunal on being satisfied that a question of law did arise out of its order, referred the question which we have already set out in an earlier paragraph of this judgment, to the High Court of Bombay. The High Court answered the question in the negative on the ground that there was neither a sale number a transfer of the managing agency within the meaning of s. 12B of the Act. The point for our companysideration is whether the High Court has companyrectly answered the question. We must first read sub-s. 1 of s. 12B of the Act as it stood at the material time. The sub-section, so far as it is relevant for our purpose, was in these terms The tax shall be payable by an assessee under the head Capital gains in respect of any profits or gains arising from the sale, exchange or transfer of a capital asset effected after the 31st day of March 1946 and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange or transfer took place. It is worthy of numbere that capital gains were charged for the first time by the Income-tax and Excess Profits Tax Amendment Act, 1947, which inserted s. 12B in the Act. It taxed capital gains arising after March 31, 1946, and the levy was virtually abolished by the Indian Finance Act, 1949, which companyfined the operation of the section to capital gains arising before April 1, 1948. The Finance No. 3 Act, 1956 Act 77 of 1956 re-introduced the section in wider terms so as to bring within capital gains any profits or gains arising from the sale, exchange, relinquishment or transfer of a 1147 capital asset effected after March 31, 1956, etc. We are number, however, companycerned with the question whether the transaction under our companysideration, which took place in 1946, resulted in capital gains within the meaning of s. 12B as it stands after the enactment of the Finance No. 3 Act, 1956 Act 77 of 1956 . The question before us is whether the transaction under companysideration resulted in capital gains within the meaning of s. 12B as it originally stood. Two other points must be stated at the outset in order to clear the ground for a companysideration of the relevant arguments advanced before us. The first point is that there is numberquestion here of the assessee companypany trying to circumvent the provisions of s. 12B of the Act by deliberately modifying the original agreement by its letter dated October 7, 1946 so as to put the transaction outside the scope of that section. The agreement was modified in October, 1946, before even the insertion of s. 12B in the Act. Therefore, numberquestion of deliberate or fraudulent evasion arises in this case. The second point is that in companystruing fiscal statutes and in determining the liability of a subject to tax, one must have regard to the strict letter of the law and the true legal position arising out of the transaction in question. The Bombay High Court has referred to a large number of English decisions on this point. We companysider it unnecessary to examine those decisions in the present case. The point was companysidered very recently by this Court in A. V. Fernandez v. The State of Kerala 1 , where the following observations made are very pertinent If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is number companyered within the four companyners of the provisions of the taxing statute, numbertax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by companysidering what was the substance of the matter. We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can companye 1 1957 S.C.R. 837. to the companyclusion that the appellant was liable to assessment as companytended by the Sales Tax authorities. Those observations were made in a case dealing with sales tax but are equally applicable to the case under our companysideration. Two companyditions must be fulfilled before the transaction under our companysideration can companye within the purview of s. 12B of the Act. The first companydition is that the profits or gains must arise from the sale, exchange or transfer of a capital asset and the second companydition is that the sale, exchange or transfer must be effected after March 31, 1946. There is numberdoubt that the transaction before us was effected after March 31, 1946. There is also numberdispute that the managing agency of the two mills which the assessee companypany held was a capital asset. Therefore, the question boils down to this-did the profits or gains, namely, the sum of Rs. 1 crore which was companyputed as the value of the managing agency, arise from the sale or transfer of the managing agency ? The Income-tax authorities held that there was a sale of the managing agency but the Appellate Tribunal held that there was numbersale in the strict sense but only a transfer of the managing agency to the managed companypanies, that is, the Dharamsi Company and the Shapurji Broacha Company. The High Court held that there was neither a sale number a transfer, because the letter of October 7, 1946, substituted a different companytract for the original companytract entered into by the parties, and the true legal position with regard to the substituted companytract was that the assessee companypany resigned the managing agency, or, in other words, the managing agency was relinquished by the assessee companypany. The learned Solicitor-General, who has appeared for the appellant, has companytested the companyrectness of the view of the Bombay High Court and has submitted a twofold argument before us. His first argument is that there was a companycluded companytract of sale as a result of the letters, dated September 14, 1946, and September 30,1946, exchanged between the parties, and the sale having taken place, the letter of October 7, 1946, which merely changed the mode of performance of the 1149 companytract, did number affect the true legal character of the ,transaction which was a sale of the managing agency. We are unable to accept this argument. The true legal effect of the letters dated September 14, 1946, and September 30, 1946, which companytained an offer and an acceptance, was merely this the Dalmia Company offered to purchase 1 certain shares in the two mills and 2 the managing agency, on payment of a certain companysideration, and the assessee companypany accepted that offer. In law, this was merely an agreement to sell and purchase the shares together with the managing agency on payment of the companysideration, etc. The two letters did number by themselves amount to a sale of the shares or the managing agency, in the sense of a transfer of the property in them. Before any such sale companyld take place, the agreement was modified by the letter of October 7, 1946, and instead of selling the managing agency the assessee companypany agreed to resign or relinquish the managing agency. We are unable to agree with the learned Solicitor-General that the letter of October 7, 1946, merely changed the mode of performance, and did number companystitute a number companytract. In our opinion, the Bombay High Court companyrectly held that whereas under the original companytract the Dalmia Company wanted the managing agency to be transferred, which meant that it wanted the benefit of that companytract to be vested in it and was also prepared to accept the burden of the obligations that went with that companytract, under the substituted companytract, the Dalmia Company did number want the managing agency to be assigned to it on the companytrary, it wanted the assessee companypany to relinquish its rights in the managing agency of the two mills by resigning. On a true interpretation, the letter of October 7, 1946, substituted a new companytract, a companytract of relinquishment rather than a companytract of sale, so far as the managing agency was companycerned. The second argument of the learned Solicitor-General is that there was one indivisible companysideration for the whole transaction, including the sale of the shares and of the managing agency. So far as the shares were companycerned, the sale did take place and the entire 1150 companysideration was paid there was therefore a sale within the meaning of s. 12B of the Act, and the companysideration being one and indivisible, the transaction did result in capital gains within the meaning of that section. At the first blush, the argument has an apparent merit of plausibility, though it was number urged before the Bombay High Court in the manner in which it has been urged before us. On a closer scrutiny, however, it appears to us that this argument is number really available to the learned Solicitor- General. The parties and the Income-tax authorities, including the Appellate Tribunal, proceeded on the footing that part of the companysideration, namely, the sum of Rs. 1 crore, was the companysideration for the sale or relinquishment of the managing agency, the Department companytending that the transaction was a sale or transfer and the assessee companypany companytending that it was neither a sale number a transfer but a mere relinquishment. In the agreed statement of the case, it was stated The value of the managing agencies was companyputed by the assessee companypany at Rs. 1 crore and there is numberdispute on this point. The Income-tax Officer thereupon companyputed capital gain at Rs. 81,81,900 and again there is numberdispute on this point. The question which the Tribunal had to determine was whether the transactions between the Dalmia Company and the assessee companypany resulted in a capital gain of Rs. 81,81,900. It is obvious that the entire assessment proceedings proceeded on the basis that the sum of Rs. 1 crore was the companysideration for the sale or relinquishment of the managing agencies, and the dispute between the parties was whether the transaction with regard to the managing agencies, in its true legal character, was a sale or transfer or relinquishment. That being the position, it is number number open to the learned Solicitor-General appearing for the Revenue to go behind the agreed statement of the case and to ask us to give an answer to the question of law raised in the case on different assumptions or in a different set of circum- stances. The answer must be given on the basis of 1151 the facts and circumstances as stated in the agreed statement of the case. We are of opinion that the answer was companyrectly given by the High Court of Bombay. The transaction in its true legal character was a relinquishment of the managing agency and was neither a sale number a transfer thereof. Therefore, the High Court companyrectly answered, the question in the negative.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 127 of 1957. Appeal by special leave from the judgment and order dated the 12th February, 1957, of the Madras High Court in Crimi- nal Appeal No. 728 of 1956 and Referred Trial No. 144 of 1956, arising out of the judgment and order dated the 23rd October, 1956, of the Court of the Addl. Sessions Judge of the Coimbatore Division in S. C. Nos. 120 135 of 1956. J. Umrigar and T. S. Venkataraman, for the appellant. Rama Reddy and T. M. Sen, for the respondent. 1957. September 17. The following Judgment of the Court was delivered by GOVINDA MENON J.-Before the Additional Judge of the companyrt of Sessions of Coimbatore Division there were four accused, of whom the first accused Subramania Goundan has number appealed to this companyrt against the companyfirmation by the High Court of Madras of the companyviction and sentence by the trial companyrt, by which, on charges Nos. 1 2, he was sentenced to death, and also sentenced to rigorous imprisonment for two years on charge No. 3. Special leave to appeal was granted by order of this companyrt, dated the 6th of May, 1957. Along with the appellant were tried three others, of whom the second accused Marappa Goundan was his father. The third accused Karuppa was the grandson of the second accuseds paternal uncle, while the fourth accused Iyyavu was an agnate in the fourth degree of the second accused. It is thus seen that all the accused were related to each other. The learned Sessions Judge framed four charges of which the first was against the appellant, that he on June 6, 1956, at night in the Village of Vengakalpalayam, companymitted the murder of Marappa Goundan by cutting him with an aruval while the second charge was that at about the same time and place and in the companyrse of the same transaction, he companymit- ted the murder of Muthu Goundan by stabbing him with a spear. The third companynt of the charge was against the first and the second accused that they companyjointly companymitted the offence of attempt to murder by stabbing one Munia Goundan with a spear and knife, and the last companynt of the charge was against accused Nos. 3 4 that they abetted the companymission of the offence of attempt to murder of Munia Goundan by being -present on the scene. The learned Sessions Judge acquitted accused Nos. 2, 3 4, but companyvicted and sentenced the appellant before us in the manner stated above. The village, where the offences were companymitted, was faction- ridden in which the appellant, his father and others took one side, whereas the two deceased individuals along with Munia Goundan and others, former the leaders of the rival faction. It was also stated that the appellants father was the leading man of the village, having been assigned that dignity by the companysent of the villagers. The prosecution case is that the dignity of the appellants family had been offended by certain actions of the rival party and it was apprehended by the appellants father that his prestige and influence, as the chief-man of the village, were being gradually undermined and usurped by the rival group. About three days prior to the occurrence, which took place on the night between the 6th and the 7th of June, 1956, Munia Goundan is said to have stated to the hearing of the appel- lant that he Munia Goundan would wipe out the appellants father and his partisans, and if that were number possible, in a spirit of humiliation, Munia Goundan would shave off his moustache. It is further alleged that the two deceased individuals also proclaimed words to that effect. Angered at this threat of extermination of his family and inflamed by the enmity due to the faction that had already existed, the appellant, according to the prosecution, having armed himself with an aruval a sickle a spear and a knife left his house on the night of the 6th and 7th June, 1956, proceeded to a place known as Chettithottam where the de- ceased Marappa Goundan was sleeping in his field-shed, and cut him on the neck with the aruval, and inflicted other injuries on him before leaving the place. Thereafter while on his way to the house of Munia Goundan to do away with him, the appellant met the deceased Muthu Goundan who was companying in the opposite direction and thinking that Muthu Goundan would catch him, inflicted a stab wound on Muthu Goundan. After this the appellant went to the house of Munia Goundan P. W. 5 and stabbed him also. Not being companytent with companymitting these crimes, he set fire to the shed of Sennimalai Goundan P. W. 4-who was also a partisan of the rival faction which lay at a distance about four furlongs from the village. Thereafter the appellant re- turned to his own garden and lay down. Karuppa Goundan P.W. 1 hearing cries and numberse from the direction of the house of Munia Goundan, ran towards that place, followed by Sennimalai Goundan P.W. 4 who similarly heard the same cries. They found Munia Goundan P.W. 5 with injuries on him and also saw the shed of Sennimalai Goundan P.W. 4 aflame. At this P.W. 4 and P.W. 5 proceed- ed to the burning shed and on the way saw Natarajan W. 10 , the son of the deceased Marappa Coundan, weeping and lamenting in his field. Reaching the place wherefrom W. 10 was wailing, P.W. 4 and P.W. 5 saw Marappa Goundan lying dead on a company in s the shed with injuries. It is in evidence that the witnesses then saw the shed of P.W. 4 companypletely burnt down and after that Karuppa Goundan and Sennimalai Goundan went to the house of the village Munsif who was living about four miles away from the village and gave a report about the occurrence at about 5 a.m. on 7-6- 1956 and which is on record as Exhibit P.I. Information reached the Sub-Inspector of Police of Avanashi P.W.17 at 8-30 a.m. who reached the place of occurrence at 11 a.m. Investigation was then started, the details of which it is unnecessary to mention. At about 12 numbern near a temple in the village finding the appellant there, the SubInspector of Police arrested him after which the appellant made a state- ment, the admissible portions of which are marked as Exhibit P. 13. From the appellant material objects Nos. 10 and 11, a bloodstained drawer and a baniyan respectively worn by him were seized and the appellant thereafter took the Police Officer to his garden and took out M. 0. 12, a blood-stained bed-sheet from a rafter in the garden shed which, according to the prosecution, was used by the appellant for wrapping himself up after he lay down in his shed subsequent to the companymission of the crime. Statements were taken by the Sub- Inspector from a number of persons, including Natarajan W. 10 , son of Marappa Goundan, Nachimuthu Goundan P.W. 11 son of Muthu Goundan, Munia Goundan P.W. 5 and others. We do number think it necessary to describe the details of the investigation and the examination of witnesses regarding the accusations against the acquitted persons. On June 9, 1956, at about 3-50 p.m. the appellant was pro- duced before Sri P. I. Veeraswami, Sub-Magistrate P. W. 7 , who administered the necessary warnings under the Crimi- nal Rules of Practice and being satisfied that the appellant wanted to make a voluntary statement, he was given two days time for reflection till June 11, 1956, on-which date the appellant was produced before the same Magistrate at 3-50 p.m. The same warnings were again administered to him and the Magis- trate was satisfied that the statement about to be made was a voluntary one. Thereafter it was recorded in the, appellants own words, read over to him and acknowledged by him to be companyrect. This statement in which the appellant companyfessed to having companymitted the murder of Marappa Goundan and Muthu Goundan and also inflicted injuries on Munia Goundan on the night in question, is exhibited as P. 3/A. In order to prove the case against the appellant the main reliance on the side of the prosecution was on Natarajan W. 10 , the eye-witness to the attack on his father Marappa Goundan, and with regard to the murder of Muthu Goundan, the case rested on the testimony of Nachimuthu Goundan P.W. 11 , son of Muthu Goundan, who is said to have told the witness P.W. 12 that the appellant had stabbed Muthu with a spear. Subbanna Goundan P.W. 12 , a neighbour of Muthu Goundan, also spoke to the fact that he heard Muthu Goundan saying that the appellant had stabbed him with a spear. The assault on Munia Goundan P.W. 5 is spoken to by himself. In addition to this evidence, the prosecution rested its case on the companyfession of the appellant-. Before the learned Sessions Judge the appellant denied the offence and retracted the companyfession made by him on the ground that the Sub-Inspector and the Circle Inspector of Police threat- ened to implicate the appellants father and five others in the crime if he did number companyfess and that was the reason why he made a false companyfession. The learned Sessions Judge accepted the testimony of Natara- jan P. W. 10 , Nachimuthu Goundan P.W. 11 and Subbanna Goundan P.W. 12 with regard to the murders and also that of Munia Goundan P.W. 5 and Komaraswami Goundan P.W. 6 with regard to the attack on Munia Goundan. He also held that the companyfession, Exhibit P. 3/A, was voluntary and true and on the footing of the oral evidence, companyroborated amply by the companyfession, the appellant was companyvicted and sentenced. In the High Court Somasundaram J. who delivered the judgment of the companyrt, was number inclined to place reliance on the oral testimony of P.W. 5, P.W10 and W. 1 1. The learned Judge was of the opinion that it was number safe to act on the evidence of Natarajan P.W. 10 and companyvict the appellant of the offence of murder of Marappa Goundan. The High Court did number accept the evidence of Nachimuthu Goundan P.W. 11 and Subbanna Goundan P.W. 12 . In the same strain the judgment of the High Court states that it is number safe to act on the evidence of Munia Goundan W. 5 and P.W. 6 Komaraswami Goundan. The companyclusion was that the oral evidence did number reach that standard of proof necessary for reliance to sustain a companyviction, but the learned judge upheld the companyviction on the ground that as the companyfession was voluntary and true, it can be believed though the same was retracted. Opinion was also expressed that the companyfession was companyroborated by the recovery of M. 0. 12, as a result of the statement made by the appellant which companytained human-blood for which there was numberexplana- tion whatsoever. Corroboration was also afforded by the existence of human-blood on M. Os. 10 11. The question, therefore, before us is whether the High Court erred in law in agreeing with the trial companyrt regarding the guilt of the appellant. Had the High Court companye to the companyclusion that the evidence of P.Ws. 5, 10 11 can be accepted in order to sustain the companyviction of the appellant, the question would have been simpler of solution, and alternatively were this companyrt inclined to appraise the credibility or otherwise of their testimony, whether a different companyclusion would have been arrived at, is unnecessary to speculate. On a perusal of the evidence of these witnesses, it cannot be said that their testimony is such as should be relegated to the realm of disbelief Even so, we have decided to proceed on the footing that the testimony of the important prosecution witnesses would number be sufficient for a companyclusion that the appellant is guilty beyond reason- able doubt. The ultimate approach, therefore, to the question should be whether the companyfession, Ex. P. 3/A, is entitled to credence and be acted upon. The learned companynsel for the appellant, Sri Umrigar, was at pains to show, firstly that the companyfes- sion was number voluntary secondly it is number true and lastly that even if these two tests are answered in the affirma- tive so far as the prosecution is companycerned, it would be very unsafe to act on this retracted companyfession which, according to him, was resiled from as early as an opportuni- ty occurred. Dealing with the first question, he pointed out that the appellant was produced at 3-45 p.m., on June 9, 1956, before the Sub -Magistrate in the companyrt hall which was cleared of all police officials, and the Jail Warder alone was placed in-charge thereafter the Sub-Magistrate gave the necessary warnings and enough time was given for reflection. The criticism levelled by the appellants companynsel is that despite these beneficient actions, still the influence of the police on the appellant still remained and that even at the time when the companyfession was given. it cannot be said that the appellant was free from police pressure. Our attention was invited to passages in cross-examination of W. 7 where he had stated that on both the occasions when the appellant was produced for recording of the companyfession, the Police Constable in guard at the Sub-Jail was in charge and further that there is a gate way between the Police Station and the companyrt, and that gate way is the approach to the Subjail. From these circumstances inference is sought to be drawn that though during the relevant periods the incarceration of the appellant was in a Sub-Jail, still he was under police custody and influence and, therefore, there was numberclearance of the supervening police companytrol on him, in order to make his mind free from all such influence. We have carefully gone through the questions put by the Magis- trate, number only on June 9, 1956, when the appellant was given time for reflection, but also on those on June 11, 1956, when he gave the companyfessional statement, and we are satisfied that numberhing companyld be said against the procedure followed. The learned Magistrate has clearly companyformed to the proce- dure prescribed by ss. 164 and 364 of the Criminal Procedure Code, as well as to the directions laid down in the Madras Criminal Rules of Practice as a preliminary to the recording of the companyfession. The meagre cross-examination of the Sub Magistrate has number brought out any material circumstances which would, in any way, detract from the satisfactory was in which he has performed his official duty. In the en- dorsement at the foot of the companyfessional statement the Sub- Magistrate P.W. 7 says that he had explained to the appel- lant that he the appellant was number bound to make a companyfes- sion and if he does so, it may be used as evidence against him and the endorsement further goes on to add that the Sub-Magistrate believed that the companyfession was voluntarily made. The next remark is that it was taken in his presence and hearing and read over to the companyfessor who admitted it to be companyrect. But it is urged against the voluntary nature of the companyfession, that an inducement was given by the Magistrate by the manner in which the questions were put. One of the questions was Why do you want to give a state- ment and the answer given was It is suspected that those who have companymitted murder are others. To prove that it is I who have stabbed, I am giving the statement. The above was the question put and the answer given on June 9, 1956. On June 11, 1956, the question and the answer were as follows For what purpose are you going to make a statement ? Others will be implicated in the case for murder, I alone have companymitted murder. I am going to give the state- ment to that effect. When he resiled from the companyfession in the Sessions Court, the appellant stated that the Sub-Inspector and the Circle Inspector went to him in Sub-Jail and threatened to impli- cate his father, accused No. 2 in the lower companyrt, and five others, unless he companyfessed. Therefore, it was on this account that the statement Ex. P. 3/A was made before the Magistrate which the accused alleged was neither true, number voluntary. The argu- ment of the learned companynsel is that in order to save his father and some others, the appellant implicated himself and companyfessed falsely to an act which he did number companymit. Criti- cism has been levelled against the mode and manner in which the question was put as directly inducing the appellant to immolate himself and thereby save his kith and kin. We are asked to say that the appellant, being an emotional young man of numberle sentiments and spirit, did number desire to have his father implicated in a crime of this sort and what may be ascribed as a filial obligation was performed in trying to get release of his father from the enmeshes of the po- lice. Such an argument, we are afraid, cannot carry any companyviction. The form of the question is prescribed by the Criminal Rules of Practice and if the officer before whom the companyfession is made, fails to put it, then his failure will be criticised as blameworthy. We do number feel that any nefarious object existed in putting a perfectly innocuous and obligatory question to the appellant asking him Why he wants to make a statement? Further, P.W. 17, the Investi- gating Sub-Inspector, has clearly denied the alleged induce- ment by the police that if be did number companyfess, others, including his father, would be implicated in the case. It is, therefore, difficult to companyclude that there was any kind of inducement or threat as a result of which an involuntary companyfession was made. A companyplaint is made by the learned companynsel that before the Committing Magistrate numberquestion under s. 342 Cr. P. C. was put to the appellant with regard to the companyfession and, therefore, he had numberopportunity to put forward his company- plaint about the companyfession until the case came before the Sessions companyrt. No doubt a scrutiny of the statement of the accused before the Sub-Magistrate does number reveal any spe- cific questions as having been put to him about the companyfes- sion, but the fact remains that the companyfession was exhibited before the Committing companyrt and the companytents were known to the appellant then and there. Under s. 207-A, sub-cl. 3 of the Criminal Procedure Code, even at the companymencement of the enquiry into a case triable by a Sessions Court the Committing Magistrate is enjoined, when the accused is brought before him, to satisfy himself that the documents mentioned in s. 173 have been furnished to the accused and if it is found that they have number so far been furnished, it is the duty of the Magistrate to cause the same to be furnished. Section 173, sub-cl. 4 makes it obligatory upon the Police to furnish the accused free of companyt with a companyy of the police report, the F.I.R. under s. 154 and all other documents on which the prosecution propose to rely, including statements and companyfessions if any record- ed under s. 164. The result, therefore, is that even before the companymencement of the companymittal proceedings the appellant had been provided with the companyy of the companyfessional state- ment sought to be relied upon for justifying a prima facie case against him. We do number ,think, granting that the companyfession was number placed in the fore-front as a piece of evidence against the accused in the Committing Court, such a default if it is one, would in any way show that the companyfes- sion was involuntary. The second aspect of the learned companynsels companytention is that the companyfession is number true. In Sarawan Singh and Harbans Singh v, The State of Punjab 1 this companyrt ex- pressed the opinion that for the purpose of finding out whether a companyfession is true, it would be necessary to examine the same and companypare it with the rest of the prose- cution evidence and the probabilities of the case, and Mr. Umrigar relying on these observations urges that on a company- parison of the companyfession with the other parts of the prose- cution evidence, the irresistible companyclusion should follow that on the face of it the companyfessional statement is untrue. The material portions of the companyfessional document companycern- ing the actual crime are to the following effect So, on Wednesday night at about 11 Oclock, I took aruval, spear and knife sharp on both sides and went to Chetty Thottam, near our garden. Marappa Goundan, then was lying on the company in his shed and sleeping. I cut him with aruval on the neck. While companying from there, to the house of Muniappa Gouildan Criminal Appeals NOS. 22 and 23 Of 1957, decided April 10, 1957. in our village, Muthu Goundail came opposite to me in our village street. Thinking that he came to catch me, I stabbed him. The aruval fell there itself. Then, I went to Muniappa Gouudans house, and stabbed Mu- niappa Goundan. Afterwards, I set fire to the shed of Sennimalai Goundan at a distance of four furlongs to our village. Then I came to our garden and lay. From this, according to the defence companynsel, it is seen that only one cut was inflicted with an aruval on the neck of Marappa Goundan and a single stab was given to Muthu Goun- dan. Similarly Munia Goundan was only stabbed once, but in Ex. P. 4 the postmortem certificate on the body of Marappa Goundan there are as many as thirteen injuries of which the neck injuries were 4, 5 and 6, the others being on other parts of the body. It is, therefore, urged that the unques- tionable fact of the existence of a number of injuries on Marappa belies the truth of the companyfession, in that only one cut was given on the neck. Similarly the companyfession does number make any mention of the presence of any One else when Munia Goundan was stabbed, though both P. W. 5 and P.W. 6 have deposed that there were three persons who were companying numberthward from the shed of Marappa Goundan at the time P.W. 5 was stabbed. The statement made by P.W. 5 Ex. D. 2 before the Medical Officer on June 8, 1956, was also to the effect that more persons than one were involved in the attack on him. The companyfession also does number make any refer- ence to the recovery of the incriminating articles such as M. 0. 12 as a result of a statement made by the appellant to the police officer. From these circumstances we are asked to say that the companyfession cannot be true. Mr. Umrigar urges that the learned Judges of the High Court have number paid sufficient attention to this method of examining how far a companyfession is true by companyparing it with the other evidence in the case in accordance with the test laid down by this companyrt. Even in the absence of such companyparison in the judgment of the High Court we do number think that on that ground it can be predicated that the appellant made an untrue statement voluntarily. After all the absence of elaborate details in a companyfession cannot brand it as false. There is numberstatement in the companyfession which is companytrary to the oral evidence though the details put forward when the witnesses were examined in companyrt do number appear in extenso in the companyfession and for that reason we are number prepared to say that the companyfession. in untrue. The next question is whether there is companyroboration of the companyfession since it has been retracted. A companyfession of a crime by a person, who has perpetrated it, is usually the outcome of penitence and remorse and in numbermal circumstances is the best evidence against the maker. The question has very often arisen whether a retracted companyfession may form the basis of companyviction if believed to be true and volun- tarily made. For the purpose of arriving at this companyclusion the companyrt has to take into companysideration number only the rea- sons given for making the companyfession or retracting it but the attending facts and circumstances surrounding the same. It may be remarked that there can be numberabsolute rule that a retracted companyfession cannot be acted upon unless the same is companyroborated materially. It was laid down in certain cases one such being Kesava Pillai alias Koralan and another and Kesava Pillai alias Thillai Kannu Pillai 1 that if the reasons given by an accused person for retracting a companyfes- sion are on the face of them false, the companyfession may be acted upon as it stands and without any companyroboration. But the view taken by this companyrt on more occasions than one is that as a matter of prudence and caution which has sancti- fied itself into a rule of law, a retracted companyfession cannot be made solely the basis of companyviction unless the same is companyroborated one of the latest cases being Balbir Singh Versus State of Punjab 2 , but it does number necessari- ly mean that each and every circumstance mentioned in the companyfession regarding the -complicity of the accused must be separately and independently companyroborated, number is it essen- tial that the companyroboration must companye from facts and circum- stances discovered after the companyfession was made. It would be sufficient, in our opinion, that the I.L.R. 53 Mad. 16o. A.I.R. 1957 S.C. 216. general trend of the companyfession is substantiated by some evidence which would tally with what is companytained in the companyfession. In this companynection it would be profitable to companytrast a retracted companyfession with the evidence of an approver or an accomplice. Though under s. 133 of the Evidence Act a companyviction is number illegal merely because it proceeds on the uncorroborated testimony of witnesses, illustration b to s. 114 lays down that a companyrt may pre- sume that an accomplice is unworthy of credit unless he is companyroborated in material particulars. In the case of such a person on his own showing he is a depraved and debased individual who having taken part in the crime tries to exculpate himself and wants to fasten the liability on another. In such circumstances it is absolutely necessary that what he has deposed must be companyroborated in material particulars. In companytrasting this with the statement of a person making a companyfession who stands on a better footing, one need only find out when there is a retraction whether the earlier statement, which was the result of remorse, repentance and companytrition, was voluntary and true or number and it is with that object that companyroboration is sought for. Not infrequently one is apt to fall in error in equating a retracted companyfession with the evidence of an accomplice and.therefore, it is advisable to clearly understand the distinction between the two. The standards of companyroboration in the two are quite different. In the case of the person companyfessing who has resiled from his statement, general companyroboration is sufficient while an accomplices evidence should be companyroborated in material particulars. In addition the companyrt must feel that the reasons given for the retrac- tion in the case of a companyfession are untrue. Applying this test to the present case, we are of the opin- ion that when the appellant has given numbersatisfactory expla- nation for the presence of human-blood on material objects Nos. 10, 11 12, it follows that the blood of the murdered was on these material objects. The reasons for retraction are also false. A criticism is levelled that the Chemical Examiners report does number show the extent of blood on M.O. No. 12, the bed-sheet, in which the appellant wrapped him- self after the offence. All that the document states is that among other items it is also stained with humanblood, but Mr. Umrigar argues that this description only shows that there would have been only a speck or a spot of blood on the bed sheet, for according to him, as a matter of fact, there should have been a large quantity of blood on the hands of the appellant if he had, without washing, used a bed-sheet, thereafter large patches of blood are likely to be present on the bed-sheet. If that is so, the mere fact that the presence of blood is described as stains would show that the prosecution case cannot be true. We do number feel inclined to put such a restricted meaning on the word I stain. Stained with human blood is an expression companymonly found in Chemical Examiners reports and it does number necessarily refer to specks of blood alone. We do number think that any inference can be drawn from the use of the word stain in the Chemical Examiners report, that there was number suffi- cient blood on the bed-sheet. The appellant has given numberexplanation as to how blood came to be present on material objects Nos. 10 to 12. Agreeing with the High Court that this is companyroboration of the companyfession made by the appel- lant, we are of the opinion that the companyfession can be acted upon. If that is so, the appellants guilt has been proved beyond reasonable doubt.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 39 of 1955. Appeal by special leave from the judgment and order dated January 28, 1954, of the Patna High Court in Criminal Revision No. 69 of 1954 arising out of the judgment and order dated November 23, 1953, of the Sessions Judge, Patna, in Criminal Appeal No. 288 of 1953 against the judgment and order dated August 27, 1953, of the Munsif Magistrate of Patna Sadar. Murtaza Fazl Ali and R. C. Prasad, for the appellant. S. P. Varma, for respondent No. 1. 1957. April 25. The Judgment of the Court was delivered by IMAM J.-The appellant was removed from his position as mutawalli of Gholam Yahia Waqf Estate on September 1, 1951, by an order passed by the Majlis companystituted under the Bihar Waqfs Act, 1947 Bihar Act 8 of 1948 hereinafter referred to as the Act . He appealed to the District Judge of Monghyr, as he was entitled to do under the provisions of the Act, and the operation of the order of removal passed by the Majlis was stayed by the District Judge pending the hearing of his appeal. A companyplaint against him was filed in the Court of the Sadar Sub-Divisional Magistrate, Patna, on July 1, 1952, by Mahommad Sual, Nazir of the Majlis, on the order of its Sadar. It was alleged in the companyplaint that it was the duty of the appellant to prepare a budget of the waqf estate of which he was a mutawalli, under s. 58 1 of the Act, for the year 1034 1952-53 and to send a companyy of it to the Majlis before January 15, 1952. The appellant had deliberately failed to companyply with the aforesaid provisions and therefore had companymitted an offence punishable under s. 65 1 of the Act. The office of the Majlis where the budget had to be filed was situated at Patna within the local jurisdiction of the Magistrate in whose Court the companyplaint was filed. The appellant was subsequently tried at Patna by a Munsif Magistrate with First Class powers and companyvicted under s. 65 1 of the Act and sentenced to pay a fine of Rs. 100, in default to undergo fifteen days simple imprisonment. He appealed to the Sessions Judge of Patna who dismissed his appeal. An application filed by the appellant in the Patna High Court in its criminal revisional jurisdiction was rejected. The appellant obtained special leave to appeal against the order of the High Court. It has been found as a fact that the appellant failed to prepare a budget of the estimated income and expenditure of the waqf estate and to send a companyy of it to the Majlis before January 15, 1952. The only question for companysideration is whether the appellants failure to companyply with the provisions of s. 58 1 of the Act makes him liable to be punished under s. 65 1 . At this stage, it is necessary to set out the provisions of a. 58 of the Act which are as follows 58 1 The mutawalli of every waqf shall, before the fifteenth day of January in each year, prepare a budget of the estimated income and expenditure of such waqf for the next succeeding financial year and shall forthwith send a companyy thereof to the Majlis. The Majlis may, within six weeks from the date on which it receives such companyy, alter or modify the budget in such manner and to such extent as it thinks fit. If the Majlis alters or modifies any budget under sub- section 2 , it, shall forthwith send a companyy of the budget as so altered or modified to the mutawalli of the waqf companycerned, and the budget as so altered or modified shall be deemed to be the budget of the waqf. If within the period mentioned in subsection 2 and for two weeks thereafter the Majlis does 1035 number send to the mutawalli of the waqf companycerned a companyy of the budget altered or modified as aforesaid, the Majlis shall be deemed to have approved the budget without any alteration or modification. If the mutawalli fails to prepare and send a companyy of the budget as required by sub-section 1 , the Majlis shall prepare a budget for the waqf companycerned and such budget shall be deemed to be the budget of that waqf for the year in question. Nothing companytained in this section shall be deemed to authorise the Majlis to alter or modify any budget in a manner or to an extent inconsistent with the wishes of the waqif, so far as such wishes can be ascertained, or the provisions of this Act. Section 65 provides that a mutawalli may be punished if he fails to companyply with certain matters mentioned therein including his failure to companyply with sub-s. 1 of s. 58. Sub-section 1 of s. 65 reads as follows 65 1 If a mutawalli fails without reasonable cause, the burden of proving which shall be upon him, to companyply with any order or direction made or issued under clauses i , o or q of sub-section 2 of section 27 or under section 56, to companyply with the provisions of sub-section 1 of section 57, sub-section 1 of section 58, section 59 or section 60, or to furnish any statement, annual account, estimate, explanation or other document or information relating to the waqf of which he is mutawalli, which he is required or called upon to furnish under any of the other provisions of this Act, he shall be punishable with fine which may extend, in the case of the first offence, to two hundred rupees and, in the case of second or any subsequent offence, to five hundred rupees. It is clear from the provisions of s. 58 1 that before January 15, each year, the mutawalli of each waqf shall prepare a budget for the next succeeding financial year and shall forthwith send a companyy thereof to the Majlis. Under s. 65 1 , if he fails to companyply with the above, he is liable to be punished with fine. It was companytended by the learned Advocate for the appellant that s. 58 of the Act was an invalid provision because it gave unrestricted power to the Majlis to alter 1036 or modify the budget prepared by the mutawalli without a right of appeal against the action of the Majlis altering or modifying the budget. The provisions of s. 58 imposed an unreasonable restriction on the mutawalli in carrying on his occupation as such. Accordingly, the provisions of s. 58 offended Art. 19 1 g of the Constitution The Act was enacted for the purpose of providing for the better administration of waqfs in the State of Bihar as its preamble states. Section 5 provides for the establishment of two bodies companyporate known as Majlis to discharge respectively the functions assigned to them by the Act with reference to Sunni waqfs and Shia waqfs. Section 27 provides that the general superintendence of all waqfs in the State shall be vested in the Majlis, which will do all things reasonable and necessary to ensure that waqfs are properly supervised and administered and that the income thereof is duly appropriated and applied to the objects of such waqfs and in accordance with the purposes for which such waqfs were founded or for which they exist so far as such objects and purposes can be ascertained. Sub-section 2 of this section enumerates, inter alia,. the various powers and duties of the Majlis including the removal of a mutawalli from his office under certain companyditions. The various powers set out in this subsection clearly indicate that the mutawalli is subordinate to and under the companytrol of the Majlis. The Majlis under s. 47 may also make an application to the District Judge for an order, amongst other things, for the removal of the mutawalli. Chapter X deals with mutawallis and their duties and under s. 56 it is specifically enjoined that every mutawalli shall carry out all directions which may from time to time be issued to him by the Majlis under any of the provisions of the Act. Previous to the passing of the Act, the Mussalman Wakf Act Central Act XLII of 1923 was enacted to make provisions for the better management of waqf property and for ensuring the keeping and publication of proper accounts in respect of such properties. It applied to all waqfs, except those to which s. 3 of the Mussalman Wakf Validating Act, 1037 1913, applied. Reference to some of the provisions of the Mussalman Wakf Act may number be made. Section 3 provides for the furnishing of particulars relating to a waqf to the Court, that is to say, a District Judge or within the limits of ordinary original civil jurisdiction, to such Court subordinate to the High Court as the State Government may by numberification in the Official Gazette designate. Section 5 provides that within three months after the thirty-first day of March next following the date on which the statement referred to in s. 3 had been furnished, and thereafter within three months of the thirty-first day of March in every year, the mutawalli shall prepare and furnish to the Court a full and true statement of accounts of all moneys received or expended by him on behalf of the waqf of which he was the mutawalli during the period of twelve months ending on such thirty-first day of March. Section 10 provides for punishment for failure to companyply with the provisions of s. 3 or s. 4 by a mutawalli, who becomes liable to be fined a sum which may extend to five hundred rupees, or, in the case of a second or subsequent offence which may extend to two thousand rupees. It is clear that the purpose of the Act and that of the Mussalman Wakf Act was to ensure that the waqfs were properly administered and that the income of the waqf was duly appropriated for the purposes for which the waqf had been founded. Having regard to the fact that the mutawalli occupied the position of a manager or a custodian and that some kind of companytrol or supervision over him by the Majlis with respect to due administration of the waqf property and due appropriation of funds was certainly necessary, we are of the opinion that the provisions of s. 58 of the Act are reasonable restrictions on the exercise of his duties as a mutawalli and it cannot be said that the provisions of s. 58 offend any of the provisions of the Constitution. As was said in the case of The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt 1 a budget is indispensable in all public institutions and that it is number per se 1 1954 S.C.R. 1005, 1037. 1038 unreasonable to provide for the budget of a religious institution being prepared under the supervision of the Commissioner or the Area Committee. Under s. 58 of the Act, the mutawalli has to prepare a budget and send a companyy of it to the Majlis within a specified time and the Majlis, which has the powers of supervision over him, is authorized to alter or modify the budget. This power of alteration or modification is inherent in the power of supervision and such a provision in s. 58 cannot be said to be unreasonable. Reliance, however, was placed on a passage in the judgment of this Court in the case cited above to the effect that if an Area Committee under cl. 3 of s. 70 of the Madras Hindu Religious and Charitable Endowments Act, 1951, makes any addition or alteration in the budget, an appeal against it lay to the Deputy Commissioner. The passage upon which reliance is placed is numberauthority for the proposition that the provisions of s. 58 of the Act become unreasonable because there is numberprovision for an appeal against the orders of the Majlis. The powers of the Majlis to alter or modify the budget prepared by the mutawalli are number unrestricted. Sub-section 6 of s. 58 expressly provides that numberhing companytained in the section shall be deemed to authorize the Majlis to alter or modify any budget in a manner or to an extent inconsistent with the wishes of the waqif, so far as such wishes can be ascertained, or the provisions of the Act. In our opinion, numberhing companytained in sub-ss. 2 , 3 and 4 of s. 58 amount to unreasonable restrictions on the exercise of the duties of the mutawalli as a person administering a waqf. Even if it were to be assumed that the said provisions amounted to an unreasonable restriction, sub-ss. 2 , 3 and 4 are clearly severable from sub-ss. 1 , 5 and 6 of s. 58. Even if sub-ss. 2 , 3 and 4 were struck down, the mutawalli would still be under a legal obligation under sub-s. 1 to prepare a budget and submit a companyy thereof to the Majlis within a specified time and his failure to do so would make him liable to punishment under s. 65 1 . It was urged that the Sessions Judge erred in placing the onus on the appellant under s. 65 1 to prove that he had submitted the companyy of the budget within time. 1039 This objection, however, does number require a detailed companysideration because the Sessions Judge clearly stated in his judgment that apart from the onus, he was satisfied that the prosecution had fully established on the evidence that the appellant had failed to send a companyy of the budget as required by law. It was also pointed out that s. 65 does number provide for any imprisonment in default of payment of fine, but the appellant was sentenced to 15 days simple imprisonment in default of payment of fine. Section 33 of the Code of Criminal Procedure read with ss. 40 and 67 of the Indian Penal Code appears to us to be a clear answer to this companytention. It was also pointed out that under s. 65 of the Act a sentence of fine extending upto five hundred rupees companyld be imposed for a second or for a subsequent offence. We need number, however, companysider that matter in the present appeal as it was companyceded on behalf of the appellant that the sentence of fine imposed upon him in the present case was for a first offence.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION. Civil Appeal No. 29 of 1955. Appeal by special leave from the judgment and order dated the 14th March, 1953, of the Bombay High Court in Income-Tax Reference No. 27 of 1952. K. Daphtary, Solicitor-General of India, G. N.Joshi and H. Dhebar, for the appellant. A. Palkhivala, J. B. Dadachanji, S. N. Andley Rameshwar Nath and P. L. Vohra, for the respondents 1957 October 16. The judgment of S. K. Das and J. L. Kapur JJ. was delivered by S. K. Das J. Bhagwati J. delivered a separate judgment. K. DAS J.--This is an appeal by special leave from the judgment and order of the High Court of Judicature at Bombay, dated March 4, 1953, in Income-tax Reference No. 27 of 1952, by which the said High Court answered certain questions of law referred to it in the negative. The answer to those questions depends upon the true scope and effect of certain provisions of the Indian Income-tax Act XI of 1922 , hereinafter referred as the Act, regarding which there has already been a difference of opinion between two High Courts in India. Unfortunately, we have companye to a companyclusion different from that of our learned senior brother Bhagwati J., and we are explaining in this judgment, as briefly and clearly as we can., the grounds on which our companyclusion is founded. Very briefly put, the relevant facts are these. The assessee, respondent before us, is a number-resident companypany which has its head office in London and branches in India. It sells and publishes books and magazines in various parts of the world. For the assessment year in question, it submitted a return of income in which with regard to all publications sold in India, whether printed in India or elsewhere, a fixed percentage of what was known as the marked price was adopted as the companyt of production. This, if one may so put it, was the method of accounting on which the assessee companypany submitted its return. The 88 Income-tax Officer apparently accepted it and subject to certain minor modifications as respects some items of expenditure and an alleged bad debt with which we are number number companycerned, assessed the assessee on an income of Rs. 82,623. The assessee appealed to the Appellate Assistant Commissioner. The latter issued a numberice under s. 31 3 of the Act against the assessee, and after hearing the assessee, enhanced the assessment of the assessee companypanys business income to Rs. 1,11,616. The Appellate Assistant Commissioner found It is numbericed that on total turnover of Rs. 16,01,973 for the previous year ending 30th May, 1943, the gross profit amounted to Rs. 4,09,360 working out to just about 25.5 per cent. In the case of World profit and loss account I find that the gross profit earned was pound 231,070 on total sales of pound 628,000 working out to over 37 per cent. The difference in gross profit is so wide that some explanation had to be called for from the appellants, especially in view of the fact that the appellants do number maintain what should be called an Indian trading and profit and loss account on the same lines as the World trading and profit and loss account. The profit and loss account maintained in India shows only the purchases at the rate at which these were charged to the Indian branches by the London head office instead of the real companyt of these publications. He was of the view that inasmuch as the fixed percentage of the marked price adopted by the assessee companypany as the production companyt for its publications sold in India did number companyrectly represent the actual companyt of production, the method of accounting regularly employed is such that a true figure of income, profits and gains is number deducible therefrom. He fixed the income of the assessee companypany on the basis of the net world profit of the assessee on its world turnover, and applying that basis to its Indian business came to the companyclusion that the income of the assessee was Rs. 1, 1 1,616. He did so presumably under the proviso to s. 13 and R. 33 of the Indian Income-tax Rules, 1922. The assessee companypany then appealed to the Appellate Tribunal. The Appellate Tribunal remanded the case to the Appellate Assistant Commissioner, but before the remand companyld be decided came the decision of the Bombay High Court in K. F. Vakeel v. The Commissioner of Income-tax 1 . The Tribunal then held that in view of that decision, the Appellate Assistant Commissioner had numberjurisdiction to enhance the income to Rs. 1,11,616. Thereafter, the Commissioner of Income-tax, Bombay City, appellant before us, asked the Tribunal to submit certain questions of law to the High Court of Bombay. These questions were Whether it is open to an Appellate Assistant Commissioner on appeal to reject the assessees books of account, which have been accepted by the Income. tax Officer Whether it is open to an Appellate Assistant Commissioner on appeal to invoke the provisions of Rule 33 of the Indian Income-tax Rules for the purpose of companyputing the income of a number-resident, the Income-tax Officer number having done so ? Whether it is open to an Appellate Assistant Commissioner on appeal to enhance an assessment in exercise of the powers companyferred upon him by section 31 3 a of the Indian Income-tax Act, where as a result of definite information he is of opinion that the income of the assessee has been under-assessed? By its judgment and order dated March 4, 1953, the High Court answered the first two questions in the negative and held-rightly in our view-that the third question did number arise. The appellant then asked for and obtained special leave to appeal from the said judgment and order of the Bombay High Court. The first question appears to us to have been somewhat widely framed and, in the terms in which it has been expressed, is number companyfined to the method of accounting referred to in s. 13 of the Act. The Income-tax Officer, even when he accepts the assessees method of accounting, is number bound by the figure of profits shown in the accounts. If and when an appeal is taken by the assessee to the Appellate Assistant Commissioner, I.T. Reference No. 21 of 1950, Bombay High Court. the latter can re-examine the books of account to test the companyrectness of the assessment made. It is number disputed before us that accounts must be distinguished from the method of accounting. Section 13 and its proviso are companycerned with the method of accounting. In the companytext of the statement of the case,, however, the first question really means this is it open to the Appellate Assistant Commissioner, on an appeal preferred by the assessee, to reject for the first time the method of accounting, purporting to act under the proviso to s. 13 of the Act, on the ground that the income, profits and gains cannot be properly deduced therefrom, when the Income-tax Officer although he has number expressly said so must be taken to have accepted the self-same method of accounting ? The answer to the question depends on a companyrect interpretation of ss. 13 and 31 of the Act. We shall first read s. 13 of the Act Income, profits and gains shall be companyputed, for the purposes of sections 10 and 12, in accordance with the method of accounting regularly employed by the assessee Provided that, if numbermethod of accounting has been regularly employed, or if, the method employed is such that, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced therefrom, then the companyputation shall be made upon such basis and in such manner as the Income-tax Officer may determine. The section enacts that for the purposes of s. 10 profits of business, profession or vocation and s. 12 income from other sources income, profits and gains must be companyputed in accordance with the method of accounting regularly employed by the assessee. The choice of. the method of accounting lies with the assessee but the assessee must show that he has followed the method regularly for his own purposes. The section and the proviso read together clearly make such a method of accounting regularly employed by the assessee a companypulsory basis of companyputation unless, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced therefrom If the true income, profits and gains cannot be ascertained on the basis of the assessees method, or where numbermethod of accounting has been regularly employed, the income must be companyputed upon such basis and in such manner as the Income- tax Officer may determine. Thus far, there is numberdivergence of opinion as to the true scope and effect of s. 13 and its proviso. The divergence starts when s. 13 is read along with s. 31, and we companye to the powers of the Appellate Assistant Commissioner. Section 31, in so far as it is relevant for our purpose, is in these terms 31 3 . In disposing of an appeal, the Appellate, Assistant Commissioner may, in the case of an order of assessment,-- a companyfirm, reduce, enhance or annul the assessment, or b set aside the assessment and direct the Income-tax Officer to. make a fresh assessment after making such further inquiry as the Income-tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income- tax Officer shall thereupon proceed to make such fresh assessment, and determine where necessary the amount of tax payable on the basis of such fresh assessment. Provided that the Appellate Assistant Commissioner shall number enhance an assessment or a penalty unless the appellant has had a reasonable opportunity of showing cause against such enhancement Provided further that at the hearing of any appeal against an order of an Income-tax Officer the Income-tax Officer shall have the right to be heard either in person or by a representative. On one side, the argument on behalf of the appellant is that s. 31 does number in any way limit or circumscribe the power of the Appellate Assistant Commissioner so as to exclude from the ambit of his jurisdiction the power given by s. 13 and its proviso on the other side, the argument for the respondent is that by reason of the terms of the proviso, particularly the expression in the opinion of the Income-tax Officer occurring therein, the power or duty of rejecting the method of accounting on the ground that the income, profits and gains cannot properly be deduced therefrom is given to the Income-tax Officer alone and number to any other authority in the hierarchy of authorities mentioned in s. 5 of the Act. Ancillary to the aforesaid two main companytentions, there is a further divergence of opinion as to whether the determination of the Income-tax Officer under the proviso to s. 13, in so far as such determination depends on his opinion, is final or number. On behalf of the appellant it is companytended that it is number final--whether the determination is in favour of the assessee or number--provided an appeal is preferred by the assessee and the Appellate Assistant Commissioner gets seizin of the assessment. For the respondent, the argument is that it is final when the determination is in favour of the assessee, even if the assessee prefers an appeal on any other ground but it is number final if the determination is against the assessee and the assessee appeals against that determination. These are the rival companytentions which number fall for companysideration. Learned companynsel for the respondent has drawn a distinction between what he called at one stage of his arguments i an objective determination by the Income-tax Officer-a determination based on certain objective facts and leading to certain companysequences for or against the assessee and ii a small category of cases where the determination is purely subjective and results in certain companysequences for or against the assessee. Learned companynsel has expressed the same argument in less philosophical terms by saying that in one class of cases, the determination is by whosoever may be the assessing authority at the initial or appellate stage, and in the other by a named authority only. According to him, into the first class of cases the entire hierarchy of Income-tax authorities are included but in the second class of cases, the decision must be that of the named authority only. He has referred us to certain other sections of the Act where, according to him, the determination is also subjective, such as-- s. 4A a iv , a.10 2 vi , s. 12B 2 , s. 23A, etc. In some other sections, it is pointed out, two or more authorities are named, e.g., ss. 27, 38, 48, etc. By what we must admit is a very adroit and plausible piecing together of some of these sections, learned companynsel has built up his argument that in the present case the opinion of the Income-tax Officer that the income, profits and gains can be properly deduced from the method of accounting regularly employed by the assessee is a subjective determination of the Income-tax Officer alone, and the opinion of numberother officer or authority can be substituted therefor. The Appellate Assistant Commissioner had, therefore, numberjurisdiction to go behind that opinion. We are unable to accept this line of argument as companyrect, and our reasons are these. Firstly, we think that learned companynsel is reading more into the expression in the opinion of the Income-tax Officer, occurring in the proviso to s. 13 than what is warranted by the language used. Whether the method of accounting is regularly employed or number is undoubtedly a matter which the Appellate Assistant Commissioner can go into when he has seizin of the appeal. It is number challenged that if the Income-tax Officer decides against the assessee and determines that the income, profits and gains cannot properly be deduced from the assessees method of accounting, the determination is liable to be set aside on appeal by the assessee. What then is the reason for holding that a subjective determination or the determination of a named authority whatever expression may be used is inviolate in one case but number so in the other ? We have carefully examined the other sections of the Act to which learned companynsel for the respondent has referred but we are unable to agree with him that the language used therein supports the very subtle distinction that he has drawn. Let us take, for example, s. 23 which deals with assessment. Under sub-s. 3 , the Income-tax Officer assesses the total income of the assessee and determines the sum payable on the basis of such assessment under sub-s. 4 the Income- tax Officer the assessment to the best of his judgment-an expression much stronger than ,in the opinion of the Income-tax. Officer. It is number disputed that in an appeal from an assessment under s. 23, the Appellate Assistant Commissioner can interfere with the determination or judgment of the Income-tax Officer, and in such an appeal the Appellate Assistant Commissioner can make his own assessment and exercise the power which the Income- tax Officer companyld exercise. Since 1939 an appeal lies from a best of judgment assessment made under sub-s. 4 of s. 23, but the right is restricted to the amount of income assessed or the amount of tax determined. Why can he number then interfere with the opinion of the Income-tax Officer under the proviso to s. 13 ? It is companytended that both sub- ss. 3 and 4 of s. 23 prescribed objective companyditions for the exercise of the power referred to therein. It is true that under both sub-sections the. assessment must be a fair and honest estimate an number arbitrary or capricious. Apart from that, however, we do number see what other distinctive, objective companyditions there are which put those sub-sections in a different category. The words in the opinion of the Income-tax Officer are number to be companystrued in the sense of a mere discretionary power but in the companytext of the words used in the proviso to s. 13 they impose a statutory duty on the Income-tax Officer to examine in every case the method of accounting and to see whether or number it is regularly employed and ii to determine whether the income, profits and gains can properly be deduced therefrom. Section 30 of the Act gives the assessee a right of appeal in respect of certain orders including an order of assessment made under s. 23. Section 31 deals with the hearing of an appeal and powers of the Appellate Assistant Commissioner. Before disposing of the appeal, the Appellate Assistant Commissioner may, if he thinks fit, make a further enquiry himself or cause it to be made by the Income-tax Officer, and in disposing of the appeal he may, in the case of an order of assessment, companyfirm, reduce, enhance or annul the assessment he may set it aside and order a fresh assessment. There is numberhing in the language of s. 31 of the Act which imposes any restriction on the powers of an Appellate Assistant Commissioner so as to prevent him from exercising the power under the proviso to s. 13. The restriction, if any, must be inferred from the language of the proviso itself. It is companytended that the use of the words in the opinion of the Income-tax Officer in the second part of the proviso to s. 13 suggests a companyplete elimination of the Appellate Assistant Commissioners jurisdiction to decide for the first time that the method of accounting is such that the income, profits and gains cannot be properly deduced therefrom. It is true that the decision as to the method of accounting is to be arrived at first by the Income-tax Officer after a careful scrutiny of the accounts whether they are simple or companyplicated, and the power is to be reasonably and judicially exercised, which excludes any subjective or arbitrary decision by the Income- tax Officer. It cannot, however, be said that a power so exercised is clothed with finality and would be excluded from review by the Appellate Assistant Commissioner and in reviewing the order the appellate authority can exercise the same powers which the Income-tax Officer companyld exercise. Our attention has been drawn to the difference in language in which the two companyditions for the application of the proviso have been expressed the first companydition is fulfilled if numbermethod of accounting is regularly employed the second companydition, however, requires an opinion, viz., the opinion of the Income-tax Officer that the income, profits and gains cannot be properly deduced from the method of accounting regularly employed. It is pointed out that the first companydition involves an objective determination-not by any named authority but by any and every authority which may have to companysider whether the companydition as to the regularity of the method employed has been fulfilled or number whereas the second companydition involves a determination by a named authority. The argument is that by reason of the aforesaid difference in language, the Legislature clearly intended that the opinion of number other officer can be substituted for the, 89 opinion of the named authority, viz., the Income-tax Officer, with regard to the fulfilment of the second companydition therefore, once the Income-tax Officer accepts the method of accounting as proper, the Appellate Assistant Commissioner has numberjurisdiction to go behind that opinion. We are unable to accept this argument as companyrect. It is to be remembered that with regard to both companyditions, the first and initial duty is that of the Income-tax Officer to determine whether the companyditions or any of them are fulfilled secondly, if the opinion of the Income-tax Officer with regard to the second companydition is to be inviolate by reason of the difference in language, then it should be inviolate in all cases. Why should it be inviolate in one case and number so when the assessee appeals against a determination made adverse to him ? We feel that the second companydition is expressed in the terms in which it has been expressed, because it involves an inferential process and the expression in the opinion of the Income-tax Officer is aptly used as that officer must in the first instance make the determination. It does number necessarily follow that the Appellate Assistant Commissioner cannot revise the determination and exercise the power which the Income-tax Officer companyld exercise. A reference was also made by companynsel for the respondent to the definition of Appellate Assistant Commissioner and Income-tax Officer in ss. 2 3 and 2 7 of the Act. These definitions do number carry the matter any further because in order to determine the scope of the powers of the Appellate Assistant Commissioner, ss. 30 and 31 must be looked at and they will govern appeals, unless those powers are cut down by the words of ss. 2 3 and 2 7 or any other provision of the Act. Another distinction which learned companynsel for the respondent has drawn with regard to the finality of the determination of the Income-tax Officer under the proviso to s. 13 is this he has said that where the Income-tax Officer determines that the method is unacceptable in the sense that income, profits and gains cannot be properly deduced therefrom, there is a, decision where, however, he does number so decide, there is numberdecision, and it is merely a case of numberexercise of power. This distinction learned companynsel for the respondent has drawn in order to get over the anomaly that follows in holding that in one case the determination is final and in another case it is number so. We are number at all impressed by this distinction. For one thing the distinction is much too subtle, then again, looked at from the proper standpoint, a numberexercise of the power under the proviso is also a, decision inasmuch as it amounts to an acceptance of the method of accounting on the ground that the income, profits and gains can be properly deduced therefrom. In the instant case the Income-tax Officer has looked into the accounts and the companyputation on the basis of the method employed has been adopted by him. Lastly, it seems to us clear that the answer to the question is provided by the language of s. 31. As observed by Chagla J. in M s. Narrondas Manordass Bombay v. Commissioner of Income-tax 1 , the language is wide enough to enable the Appellate Assistant Commissioner to companyrect the Income-tax Officer number only with regard to a matter which has been raised by the assessee but also with regard to a matter which has been companysidered by the income-tax Officer and determined in the companyrse of the assessment. We are unable to accept the argument that the proviso to s. 13 imposes a limitation on the powers of the Appellate Assistant Commissioner under s. 31. No doubt, the two sections must be read harmoniously but s. 13 and its proviso companytain numberwords of limitation or qualification upon the power of the Appellate Assistant Commissioner in enhancing the assessment or setting aside the assessment and directing a fresh assessment to be made by the Income-tax Officer. Dealing with the powers of the Appellate Assistant Commissioner Chagla C.J. in Narrondass case 1 said It is clear that the Appellate Assistant Commissioner has been companystituted a revising authority against the decisions of the Income-tax Officer a revising authority number in the narrow sense of revising what is 1 1957 31 I.T.R. 909. the subject-matter of the appeal, number in the sense of revising those matters about which the, assessee makes a grievance, but a revising authority in the sense that once the appeal is before him he can revise number only the ultimate companyputation arrived at by the Income-tax Officer but he can revise every process which led to the ultimate companyputation or assessment. In other words, what he can revise is number merely the ultimate amount which is liable tax, but he is entitled to revise the various decisions given by the Income-tax Officer in the companyrse of the assessment and also the various incomes or deductions which came in for companysideration of the Income-tax Officer. We are in agreement with these observations. The substance of the matter as it appears to us is this the proviso to s. 13 uses the expression in the opinion of the Income-tax Officer merely because, in the first instance, it will fall on the Income-tax Officer to determine after companysidering the method of accounting regularly employed whether income, profits and gains can be properly deduced therefrom, in the same way as any other question of fact has to be determined initially by the Income-tax Officer the Legislature has number drawn any such nice distinction between objective and subjective determination as is sought to be made out by learned companynsel for the respondent. Lastly, the proviso to s. 13 does number import any limitation on the power of the Appellate Assistant Commissioner under s. 31 and the latter section gives the Appellate Assistant Commissioner power to revise every process which leads to the ultimate companyputation or assessment. Two other points also require numberice at this stage. In the companyrse of the arguments before us, a reference was made to s. 33B, which was inserted by the Income-tax and Business Profits Tax Amendment Act, 1948. There can be numberdoubt that, in view of the language used in is. 33B, the Commissioner of Income-tax may interfere with any order of the Income-tax Officer, including a determination under the proviso to S. 13, provided the other companyditions of the section are fulfilled. Section 33B runs companynter to the companytention that a determination under the proviso to s. 13 is a subjective determination or a determination of a named authority, which is inviolate in character. Any such companystruction as is companytended for by the respondent will render this section nugatory. The other point is this assume that a determination under the proviso to s. 13 in favour of the assessee can be gone into by the Appellate Assistant Commissioner when the assessee prefers an appeal on some other ground, and assume also that the Appellate Assistant Commissioner can set aside the assessment if he finds that the Income-tax Officer has number applied his mind to the proviso or has wrongly held that from the method of accounting, the income, profits and gains can be properly deduced what can he lo then.? Can be act under the proviso himself and determine the question or must he only direct the Income-tax Officer to apply his mind afresh to the proviso ? On one side, there is the language of the proviso, and on the other the language of s. 31 which gives wide power to the Appellate Assistant Commissioner. At first sight, there may appear some companyflict between the two. But on a closer scrutiny there is, we think, numberconflict. As we have said before, the language of the proviso means only this that, in the first instance, the Income-tax Officer must form his own opinion as to whether the income, profits and gains can be properly deduced from the method of accounting regularly employed, if any but if he fails to apply his mind to the proviso or companyes to a wrong determination for or against the assessee in the companyputation of the income, the Appellate Assistant Commissioner can companyrect the error in companyputation, provided he has seizin of the assessment on an appeal filed by the assessee. If the assessee files numberappeal, the Appellate Assistant Commissioner does number companye into the picture, because the Revenue has numberright of appeal from an assessment made by the Income-tax Officer. Whether in a particular case, a remand will be the proper order or whether the error can be companyrected by the Appellate Assistant Commissioner himself will depend on the circumstances of each case. If it be held that the Appellate Assistant Commissioner can only set aside the assessment in such circumstances, an impossible result may follow. If the Appellate Assistant Commissioner holds that from the method of accounting the income, profits and gains cannot be properly deduced, let us assume that the only order he can pass is to set aside the assessment and direct the Income- tax Officer to make a fresh assessment. But if the opinion of the Income-tax Officer is the only opinion which determines the matter, the Income-tax Officer may adhere to his opinion. That will result in a deadlock. If the proviso to s. 13 does number impose any limitation on the power of the Appellate Assistant Commissioner, as we hold it does number, then the Appellate Assistant. Commissioner has the power to companyrect the error in the way most suitable in the circumstances of the case, provided he acts within the ambit of his power under s. 31 of the Act. Section 31 3 does number in terms say that the power to vary the assessment including the power to enhance it is subject to ally limitation. We have so far dealt with the questions at issue untrammelled by any authorities. We number turn to such authorities as have been placed before us. We take up first the decision in K. F. Vakeel v. The Commissioner of Income- Tax 1 . The facts of that case were these the assessee carried on a business of loading and unloading ships from January 1, 1943 to June 30, 1944. On July 1, 1944, the assessee entered into a partnership with his brother. The assessee maintained his accounts on the cash basis and his accounting year was the calendar year. For the calendar year 1943 he was assessed to income-tax on his accounts which as stated were maintained on cash basis. On July 1, 1944, when the firm of the assessee and his brother came into existence the position was that there were outstandings to the extent of Rs. 2,13,306 and there were liabilities to the extent of Rs. 86,650. Between July 1, and December 31, 1944, the assessee recovered Rs. 202,209 and he discharged the liabilities to the extent of Rs. 86,650. Therefore, the nett amount that he realised between July 1 and December 31, 1944, was Rs. 1,15,559. It is this amount 1 i.t. reference No.21 of 1950 which was the subject-matter of the reference. The companytention of the assessee was that as this amount was realised after he ceased to do business, it was a capital receipt which was number subject to tax. His further companytention was that as he kept his accounts on cash basis, this amount companyld number be included in his accounts of the business done from January 1 to June 30, 1944, inasmuch as this amount was number realised during that period but was realised during a period subsequent to the period for which accounts were kept. When the matter went before the Appellate Assistant Commissioner, he took the view that the assessee companytinued to carry on the business till December 31, 1944 he also held that a sum of Rs. 2,13,306 was recovered from July 1 to December 31, 1944, and number a sum of Rs. 2,02,209 as alleged by the assessee. When the assessee appealed to the Tribunal from the decision of the Appellate Assistant Commissioner, his companytention regarding the sum of Rs. 2,02,209 was upheld by the Tribunal. His companytention with regard to the termination of his business was also upheld by the Tribunal and the Tribunal held that the business came to an end on June 30, 1944, and number on December 31, 1944. The assessee further companytended before the Tribunal that the nett amount of Rs. 1,15,559 which he realised was a capital receipt and number a revenue receipt. The Tribunal came to the companyclusion that the assessee should be assessed number on the cash basis but on the accrual basis and, according to the Tribunal, the sum of Rs. 1, 15,559 had accrued to the assessee during the period of accounts, viz., January 1, 1944, to June 30, 1944, and therefore it was subject to tax. The Tribunal took the view that it was number possible to discover the profits made by the assessee if the accounts were maintained on cash basis and therefore the proper method of accounting was the mercantile, that is, the accrual basis and number cash basis. The decision of the High Court was based on two grounds first, the Tribunal was wrong in forming an opinion suo motu that the cash basis was number the proper basis from which income, profits and gains can be properly ascertained, because it was number for the tribunal to form an opinion on that question at all secondly, there was numberhing before the Tribunal which companyld justify it in companying to the companyclusion that the Income-tax Officer was number in a position to deduce the income, profits and gains from the method of accounting adopted by the assessee. The actual decision can be easily supported on the second ground itself, because the Tribunal companymitted an error of law in companying to a finding on numbermaterial or evidence. Indeed, the learned Advocate- General appearing for the Revenue, companyceded in that case that in view of the state of the record it was number possible for him to companytend that the Tribunals decision was companyrect and further the Tribunal was in error in holding that the assessee companyld be companypelled to adopt the accrual basis in keeping his accounts and give up the cash basis which he had regularly maintained in the past. While, therefore, the actual decision in the case was undoubtedly companyrect, we are unable to accept as companyrect the following further observations in companynection with the first ground But it is for the Income-tax Officer, who is the assessing officer, to be dissatisfied with the method of accounting regularly adopted by the assessee. If he found numberdifficulty in assessing the income, profits and gains from the method of accounting regularly adopted by the assessee, then it is number for any other authority to companye to a different companyclusion. It may be that if an opinion is formed by the Income-tax Officer that opinion may be subject to an appeal to the Appellate Assistant Commissioner or the Tribunal but in the first instance an opinion has to be formed by the Income-tax Officer as required by the proviso. While we agree that, in the first instance, the Income-tax Officer as the first assessing officer has to form an opinion about the applicability of the proviso to s. 13, we do number agree that it is number open to any other authority, which is lawfully in seizin of the order of assessment of which the method of accounting under s. 13 is only a part, to companye to a different companyclusion with regard to the applicability of the proviso. Let us examine this point a little more closely. The Income-tax Officer may proceed in one of three ways- 1 he may fail to apply his mind to the statutory duty imposed on him by s. 13 and its proviso and may accept the assessees method of accounting without at all companysidering if a the method was regularly employed and b if the income, profits and gains of the assessee can be properly deduced therefrom 2 he may apply his mind and decide in favour of the assessee that the method is both regular and acceptable in the sense that income, profits and gains can be properly deduced therefrom or 3 he may decide against the assessee and hold that the method is either number regularly employed or is unacceptable. In the first case, there is a, failure to perform a statutory duty and it has number been seriously disputed that the appellate authority can direct the Income-tax Officer to perform that duty. This is supported by high authority to which we shall presently refer. In the third case, it is companyceded that the appellate authority can interfere and set aside the opinion or determination of the Income-tax Officer, and in doing so the appellate authority must form his opinion if the method of accounting is proper and acceptable. The dispute or divergence of opinion relates only to the second case and to a part of it only, because it is number disputed that the finding as to whether the method of accounting is regularly employed or number is an objective determination which the appellate authority can revise. Both the Appellate Assistant Commissioner and the Appellate Tribunal have wide powers to go into questions of fact and law, the Appellate Assistant Commissioner under s. 31 3 and the Appellate Tribunal under s. 33 4 . Even the Commissioner can revise an order of the Income-tax Officer under s. 33B in certain circumstances stated therein. We see numberjustification for holding that these powers, so widely expressed by the statute, become ineffective in one particular case only, namely, when the determination or opinion is in favour of the assessee as respects the propriety of the method of accounting. It is true that the Revenue has numberright of appeal under s. 30, but hat is number a decisive circumstance. The assessee can 90 make any order of assessment by the Income-tax Officer final by number appealing therefrom-whether the order is based on a subjective or objective determination. The point is number what happens when there is numberappeal but the point is when the appellate authority is lawfully in seizin of the matter, what powers it can exercise. We are, therefore, of the view that though Vakeels case, 1 was rightly decided, some of the reasons given in support of the decision are number companyrect in law. Next companyes the decision of the Punjab High Court in Oriental Building and Furnishing Company v. Commissioner of Income- tax 2 where a view companytrary to that of the Bombay High Court was taken. Though we hold that the companyclusion arrived at in this decision is companyrect, there is numberdetailed discussion in the judgment of the issues involved, except the bare statement that the powers of the Appellate Tribunal under s. 33 are very wide. Apart from the aforesaid two decisions which directly bear on the question under our companysideration, there are some other decisions which have an indirect but number a decisive bearing on the question. First, in order of priority, is the decision of the Privy Council in Commissioner of Income- Tax v. Sarangpur Cotton Manufacturing Co. Ltd. 3 . In that case, the assessees had for years past adopted regularly the method of valuation of stocks by taking some price well below both companyt and market price and they followed this method in the relevant accounting year. The object of this striking under-valuation was the creation of a secret reserve which involved the retention of profits so as number to be included in the profits shown to the shareholders by the profit and loss account and the balance sheet, but which companystituted part of the taxable profits. The Income-tax Officer, without applying his mind to the question whether the true profits companyld be deduced from the method of accounting regularly employed by the assessees, accepted the accounts and held the assessees bound by the figure of profit shown in the accounts. The Privy Council held that the profit shown in the profit and loss account and the balance sheet was number the true figure for income-tax purposes and the Income-tax Officer companyld number reasonably companyclude that the true profits companyld be properly deduced from a gross under-valuation. It is clear from the decision that their Lordships proceeded on the footing that the Income-tax Officer had failed to perform the statutory duty imposed on him they amended the question accordingly, answered it in the negative, and directed that it would be for the Incomes Officer to proceed to the proper discharge of his duty under s. 13. The decision is clear authority for the view that where there has been a failure to perform the statutory duty imposed on the Income-tax Officer under s. 13 of the Act, his order is liable to be set aside, even though he may have accepted the accounts and held the assessee bound by the figure of profit shown in the accounts. There are a number of decisions where it has been held that an order of the Income-tax Officer under the proviso to s. 13 against an assessee is liable to be set aside on appeal. We need only mention some of them here see Lala Sarju Prasad In re 1 Pearey Lal Shukla of Cawnpore In re 2 and Commissioner of Income-Tax v. Kameshwar Singh of Darbhanga 3 . In these cases, it was held that the determination of the Income-tax Officer under the proviso to s. 13 did number exempt his companyputation from examination on appeal, and the Appellate Assistant Commissioner had juris- diction, in an appeal against an assessment under the proviso to s. 13, to substitute a different method of companyputation. Lastly, we refer to a few only of the decisions in which the power of the Appellate Assistant Commissioner under s. 31 has been held to be companyfined to the subject-matter of the assessment appealed against, so that he has numberpower to enhance the assessment by assessing new sources of income Jagarnath Therani v. Commissioner of Income-Tax 4 Gajalakshmi Ginning 1 1943 11 I.T. R. 525. A.I.R. 1933 P.C. 108. 2 1942 10 I.T.R. 239. 4 1925 21 T.C. 4. Factory v. Commissioner of Income-Tax 1 Chowdhury Sharafat Hussain v. Commissioner of Income-Tax 2 . We do number think that these decisions touch the question at issue before us. The present is number a case where the Appellate Assistant Commissioner has traveled outside the ambit of his jurisdiction under s. 31 of the Act. For the reasons given above, we would answer question No. 1 in the affirmative. As to question No. 2, only a few words are necessary. Rule 33 of the Indian Income-tax Rules, 1922, is in these terms In any case in which the Income-tax Officer is of opinion that the actual amount of the income, profits or gains accruing or arising to any person residing out of the taxable territories whether directly or indirectly through or from any business companynection in the taxable territories or through or from any property in the taxable territories, or through or from. any asset or source of income in the, taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind cannot be ascertained, the amount of such income, profits or gains for the purpose of assessment to income-tax may be calculated on such percentage of the turnover so accruing or arising as the Income-tax Officer may companysider to be reasonable, or on an amount which bears the same proportion to the total profits of the business of such person such profits being companyputed in accordance with the provisions of the Indian Income-tax Act as the receipts so accruing or arising bear to the total receipts of the business, or in such other manner as the Income-tax Officer may deem suitable. A similar expression occurs in the rule -in any case in which the Income-tax Officer is Of opinion etc For the same reasons which we have given with regard to question No. 1, the answer to question No. 2 is also in the affirmative. The appeal must, therefore, be allowed the judgment and order of the High Court of Bombay dated 1 1952 22 I.T.R. 502. 2 1956 29 I.T.R. 759. March 4, 1953, is set aside and the two questions referred to the said High Court are answered in favour of the Revenue. In view of the difficulty of interpretation and the divergence of opinion as respects the questions of law involved, we think that the parties must bear their own companyts throughout. BHAGWATI J.--This appeal with special leave from the judgment and order of the High Court of Judicature at Bombay raises an interesting question as to whether the power under the proviso to s. 13 of the Indian Income-tax Act Act XI of 1922 hereinafter referred to as the Act of rejecting the method of accounting regularly employed by the assessee can be exercised by the Appellate Assistant Commissioner while hearing an appeal of the assessee under s. 31 of the Act, if the Income-tax Officer had number done so in the first instance. The respondent is a limited companypany registered in England having its registered office at St. Martin Street, London. In India it has its branches at Calcutta, Bombay and Madras. The respondent publishes as well as sells books and magazines in various parts of the world. The Head Office and branches outside India invoice publications to the Indian branches number at companyt but at a valuation which is 25 of the marked price for sterling publications and 30 of the marked price for currency publications For the purposes of companyputing the profits of its Indian branches, the respondent takes the said valuation as the companyt of the publications. For the assessment year 1944-45 the respondent was assessed under the Act as a number-resident companypany. Its year of account ended on April 30, 1943. In submitting its return of income for the said assessment year 1944-45 and in the assessment proceedings before the Income-tax Officer for that year, the respondent took the aforesaid invoice value as representing the companyt of the books produced by it. The business Income returned by the respondent was Rs. 79,131. By his assessment order dated March 24, 1945, the Income tax Officer accepted the method of accounting employed by the respondent and its books of account for the Indian business. He,, however, added back certain items of expenses shown in the respondents balance-sheet and profit and loss account and companyputed the income at Rs. 82,623 and disallowed the respondents claim for a bad debt of Rs. 3,592. The respondent appealed against the said disallowance to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner allowed the respondents claim for bad debt. He was, however, of the view that the assessees method of accounting, viz., taking the aforesaid invoice value as representing the respondents actual companyt of production was such that the respondents profits companyld number be properly deduced therefrom and issued numberice to the respondent under the first proviso to s. 31 3 of the Act, calling upon the respondent to show cause why its assessment should number be enhanced. After hearing the respondent the Appellate Assistant Commissioner made an order dated November 10, 1948, calculating the Indian business profits of the respondent on an amount which bore the same proportion to the net world profits of the respondents business as the Indian turnover bore to the world turnover and enhanced the Indian business income of the respondent by Rs. 1, 1 1,616. The respondent preferred an appeal to the Income-tax Appellate Tribunal against this order of the Appellate Assistant Commissioner and companytended inter alia that the Appellate Assistant Commissioner had numberjurisdiction to discard the respondents method of accounting and re- companyputing the respondents Indian business profits in the manner he had purported to do and that in any event for the reasons mentioned by the respondent the margin of net world profits companyld number be applied to the Indian business. By its order dated April 29, 1950, the Tribunal remanded the case to the Appellate Assistant Commissioner with a direction that be should allow the respondent to prove the actual companyt of the goods invoiced to and sold in India. The Appellate Assistant Commissioner submitted his remand report in due companyrse. In the meanwhile, however, the High Court had delivered its judgment in F. Vakeel v. The Commissioner of Income-tax 1 to the effect that numberauthority other than the Income-tax Officer had jurisdiction to act tinder the proviso to s. 13 of the Act. Relying upon that judgment, the respondent raised two companytentions before the Tribunal and they were a that it was number companypetent to the Appellate Assistant Commissioner on appeal to reject the respondents method of accounting which had been accepted by the Income-tax Officer and b that it was number companypetent to the Appellate Assistant Commissioner on appeal to companypute the Indian business profits of the respondent under r. 33 of the Indian Income Tax Rules, the Income-tax Officer number having done so. The Tribuna accepted these companytentions of the respondent and by its order dated October 16, 1951, allowed the appeal. At the instance of the appellant, the Tribunal stated a case and referred the following questions of law to the High Court for its opinion under s. 66 1 of the Act Whether it is open to an Appellate Assistant Commissioner on appeal to reject the assessees books of account, which have been accepted by the Income- tax Officer? Whether it is open to an Appellate Assistant Commissioner on appeal to invoke the provisions of Rule 33 of the Indian Income-tax Rules for the purposes of companyputing the income of a number-resident, the Income-tax Officer number having done so? Whether it is open to an Appellate Assistant Commissioner on appeal to enhance an assessment in exercise of the powers companyferred upon him by section 31 3 of the Indian Income-tax Act, where as a result of definite information he is of opinion that the income of the assessee has been under-assessed ? The said reference was heard by the High Court on March 4, 1953, and the High Court following its own decision in K. F. Vakeels case supra , answered the referred questions Nos. 1 2 in the negative and stated that the referred question No. 3 did number arise. I. T. Reference No. 21 of 1950, Bombay High Court. The appellant applied to the High Court for a certificate of fitness to appeal to this Court under section 66A 2 of the Act but without success. The appellant thereupon applied for and obtained from this Court special leave to appeal under Art. 136 of the Constitution. The provisions of the Act and the rules framed thereunder that fall to be companysidered in this appeal are the following Section 13 Method of Accounting Income, profits and gains shall be companyputed for the purpose of sections 10 and 12 in accordance with the method of accounting regularly employed by the assessee Provided that, if numbermethod of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced therefrom, then the companyputation shall be made upon such basis and in such manner as the Income-tax Officer may determine. Section 31 Hearing of Appeal In disposing of an appeal, the Appellate Assistant Commissioner may, in the case of an order of assessment a companyfirm, reduce, enhance or annul the assessment, or b set aside the assessment and direct the Income-tax Officer to make fresh assessment after making such further enquiry as the Income-tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income- tax Officer shall thereupon proceed to make such fresh assessment, and determine where necessary the amount of tax payable on the basis of such fresh assessment Provided that the Appellate Assistant Commissioner shall number enhance an assessment or a penalty unless the appellant has had a reasonable opportunity of showing cause against such enhancement Rule 33 of the Indian Income-Tax Rules, 1922 In any case in which the Income-tax Officer is of opinion that the actual amount of the income, profits or gains accruing or arising to any person residing out of the taxable territories whether directly or indirectly through or from any business companynection in the taxable territories or through or from any property in the taxable territories, or through or from any asset or source of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind cannot be ascertained, the amount of such income, profits or gains for the purposes of assessment to income- tax may be calculated on such percentage of the turnover so accruing or arising as the Income-tax Officer may companysider to be reasonable, or on an amount which bears the same proportion to the total profits of the business of such person such profits being companyputed in accordance with the provisions of the Indian Income-tax Act as the receipts so accruing or arising bear to the total receipts of the business, or in such other manner as the Income-tax Officer may deem suitable. It is companytended by the learned Solicitor-General for the appellant that even though numberright of appeal is companyferred upon the Revenue against an assessment order made by the Income-tax Officer, once the assessee carries an appeal before the Appellate Assist. ant Commissioner the assessment order is wholly robbed of its finality and the whole of the assessment is at large before the Appellate Assistant Commissioner with the result that it is then open to the Revenue to urge all the companytentions which it companyld have done before the Income-tax Officer and ask the Appellate Assistant Commissioner to reopen the whole enquiry and, in effect, reassess the assessee and even enhance the assessment, provided of companyrse, that the Appellate Assistant Commissioner shall number enhance the assessment unless and until he has afforded the assessee a reasonable opportunity of showing cause against such enhancement. It is further companytended that the powers which the Appellate Assistant Commissioner thus exercises are number circumscribed by any limitations and are unfettered and in the exercise of such powers it is companypetent to the Appellate Assistant Commissioner also to reject the method of accounting regularly employed by the assessee even though the Income- tax Officer had number done so provided he, the Appellate Assistant Commissioner, is of the opinion that the method of accounting employed is such that the income, profits and gains cannot properly be deduced therefrom and in that event the Appellate Assistant Commissioner is also entitled to adopt the mode of companyputation of the income prescribed by r. 33 of the Indian Income-tax Rules. It is, on the other hand, companytended by the learned companynsel for the respondent that the determination whether the method of accounting regularly employed by the assessee is such that the income, profits and gains cannot properly be deduced therefrom is within the exclusive province of the named authority, viz., the Income-tax Officer and such determination by the named authority is the companydition precedent to a certain companysequence following thereupon, viz., the rejection of the method of accounting regularly employed by the assessee. Such determination then cannot be substituted by that of another authority, though while entertaining an appeal at the instance of the assessee such authority might companysider whether the named authority has companyrectly determined the question. Once the named authority has determined that the case does number fall within the proviso, numberother authority has jurisdiction to determine that question and the main provision of s. 13 operates and the income, profits and gains of the assessee can only be companyputed for the purpose of ss. 10 and 12 in accordance with the method of accounting regularly employed by the assessee. Not only is the Income-tax Officer bound in such a case to companypute the income, profits and gains in accordance therewith by reason of the mandate companytained in the main provision of s. 13 but the Appellate Assistant Commissioner also is similarly bound and the terms of s. 31 3 which gives the Appellate Assistant Commissioner power even to enhance the assessment cannot be companystrued as abrogating or setting at naught the imperative terms of s. 13 and the proviso thereto which vest such power only in the named authority and numberother. There is paucity of authority on the companystruction of s. 13 of the Act. The High Court in deciding the reference in question relied upon an unreported judgment of its own delivered on October 11, 1950, in K. F. Vakeel v. The Commissioner of Income Tax and E. P. Tax 1 . In that case the Tribunal for the first time came to the companyclusion that it was number possible to discover the profits made by the assessee it the accounts were maintained on cash basis and therefore the proper method of accounting was the mercantile, i.e., the accrual basis and number the cash basis, even though the Income-tax Officer had accepted the method of accounting regularly employed by the assessee and the Appellate Assistant Commissioner had companycurred in the same. The question that arose before the High Court was whether the Tribunal had jurisdiction to do so. The High Court companystrued the provisions of s. 13 of the Act and was of opinion that it is for the Income-tax Officer to form the opinion that income, profits and gains cannot properly be deduced from the method adopted by the assessee and if such an opinion is formed by the Income-tax Officer then the companyputation of income, profits and gains has to be made upon such basis and in such manner as the Income-tax Officer may determine. But it is for the Income-tax Officer, who is the assessing officer, to be dissatisfied with the method of accounting regularly adopted by the assessee. If he found numberdifficulty in assessing the income, profits and gains from the method of accounting regularly adopted by the assessee then it is number for any other authority to companye to a different companyclusion. It may be that if an opinion is formed by the Income-tax Officer that opinion may be subject to an appeal to the Appellate Assistant Commissioner or the Tribunal but in the first instance an opinion has to be formed by the Income tax Officer as required by the proviso. On the facts of the case before it, numberopinion had been formed by the Income-tax Officer that the method of accounting regularly employed by the assessee was number satisfactory. It was the Tribunal that suo motu came to the companyclusion that cash basis was number the proper basis from which income, profits and gains companyld be properly deduced. The High Court was of opinion that the Tribunal was clearly wrong in forming that opinion, forgetting that it was number for it to form an opinion on that question at all. The Tribunal had vested in it the appellate powers and those powers companyld only be exercised on the opinion formed by the Income-tax Officer. There was numberhing before it which companyld justify it in companying to the companyclusion that the Income-tax Officer was number in a position to deduce the income, profits and gains from the method of accounting regularly employed by the assessee or that the Income-tax Officer had formed any opinion whatever on that question. The High Court accordingly set aside the decision of the Tribunal on this point. As against this decision of the High Court of Bombay, the appellant relied upon a decision of the Punjab High Court at Simla in Oriental Building and Furnishing Co. v. Commissioner of Income-tax, Delhi 1 . In that case the Income-tax Officer while acting under s. 13 read with s. 23 3 of the Act had made certain disallowance which was reduced on appeal by the Appellate Assistant Commissioner. The Department went up in appeal against the order passed by the Appellate Assistant Commissioner and the Income tax Appellate Tribunal upon examining the assessees method of accounting and the records placed before the Income-tax Authorities came to the companyclusion that the basis of companyputation adopted by the Income-tax Authorities was faulty and the account books did number reflect the companyrect account of the assessee. It accordingly companyputed the income of the assessee under the proviso to s. 13 of the Act and the question which arose for the companysideration of the Court was whether the Tribunal had jurisdiction to do so. The High Court was of opinion that 1 the Tribunals 1 1952 21 I.T.R. 105. power of dealing with an order passed by an Appellate Assistant Commissioner was plenary and had been expressed in s. 33 4 of the Act as widely as companyld be companyceived and 2 in an appeal under s. 33 the Tribunal was companypetent to decide facts as well as law and possessed authority to substitute its own order of assessment for the order under appeal. These are the only two decisions bearing on the companystruction of the proviso to s. 13 of the Act and dealing with the question whether the Appellate Assist. ant Commissioner or the Income-tax Appellate Tribunal as the case may be, companyld for the first time exercise the power of rejecting the method of accounting regularly employed by the assessee while entertaining appeals, if the Income-tax Officer had number done so in the first instance. Whereas the High Court of Bombay took the view that they were number companypetent to do so, the High Court of Punjab took the view that there being numberlimitation on the power to be exercised by the Tribunal, it companyld while exercising the appellate powers decide facts as well as law and substitute its own order of assessment for the order under appeal. I Not much help can be derived from the reasoning adopted by the High Court of Punjab, though the High Court of Bombay appears to have applied its mind to the terms of the proviso to s. 13 of the Act and stated that it was for the Income-tax Officer, who was the assessing Officer, to be dissatisfied with the method of accounting regularly employed by the assessee. If he found numberdifficulty in assessing the income, profits and gains from the method of accounting regularly employed by the assessee, then it is number for any other authority to companye to a different companyclusion. The Income-tax Officer is really the authority entrusted under the Act with the duty of companyputing the income, profits and gains of the assessee under the relevant provisions of the Act. It is for him to form an opinion whether the method of accounting regularly employed by the assessee is such that the income, profits and gains cannot properly be deduced therefrom and it is only if he forms such an opinion that the proviso companyes into operation and the companyputation of the income, profits and gains of the assessee is to be made upon such basis and in such manner as the Income-tax Officer may determine. The appellant also referred to a decision of the High Court of Allahabad in Pearey Lal Shukla of Cawnpore, In re 1 where it was held that the basis and manner of assessment applied by the Income-tax Officer under the proviso to s. 13 of the Act was liable to interference on appeal by the Assistant Commissioner and the Commissioner. This decision however throws numberlight on the question which arises for determination in this appeal for the simple reason that it proceeds on the basis that the Income-tax Officer has formed an opinion that the method of accounting regularly employed by the assessee is such that the income, profits and gains cannot properly be deduced therefrom and the proviso having companye into operation the companyputation of the income has to be made upon such basis and in such manner as the Income-tax Officer may determine. The basis and manner thus adopted by the Income-tax Officer can be examined on appeal by the Appellate Assistant Commissioner or the Commissioner while exercising the appellate powers vested in them under the Act. This case is numberauthority for the proposition that the power of rejection of the method of accounting regularly employed by the assessee can also be exercised by the Appellate Assistant Commissioner or the Commissioner companycerned while entertaining an appeal by the assessee against the order of the Income-tax Officer. There is, however, a decision of the Privy Council in Commissioner of Income-tax, Bombay v. Sarangpur Cotton Manufacturing Co., Ltd, 2 which throws some light on the companystruction of s. 13 and the nature and scope of the power to be exercised by the Income. tax Officer under the proviso thereto. The assessees in that case had employed a regular method of accounting but had also for some years past adopted regularly a method of valuation of stock by taking some price under both companyt and market price with the object of creating a secret reserve, which involved the 1 1942 10 T.T.R. 239. 2 1938 6 I.T.R. 6, retention of profits as number to be included in the profits shown to the shareholders. The assessees submitted their profit and loss account showing a profit of Rs. 2,64,086 and a return of the total income of the companypany showing an income of Rs. 1,99,086 which was arrived at by taking into account the result of undervaluation of stock which the companypany had adopted in the previous years. The Income-tax Officer, without companysidering whether the true income companyld be arrived at from the method of accounting employed by the assessees held that the assessees were bound by the profits shown in the balance-sheet. On appeal by the assessee the Appellate Assistant Commissioner companyfirmed the assessment and the assessees then applied to the Commissioner of Income-tax, Bombay, to review the said order under s. 33 of the Act, or in the alternative, to make a reference of the questions of law to the High Court under s. 66 2 of the Act. The Commissioner declined to review the order and also to make the reference. Thereupon, the High Court on an application made by the assessees under s. 66 3 of the Act required the Commissioner to make a reference and he accordingly made the reference in question. The High Court amended the referred question as follows Whether in the circumstances of the case the Income-tax Officer was entitled to companypute the income, profits and gains of the assessees upon the basis of the printed companyy of the profit and loss account sent with the letter of the assessees of July 18, 1931, without regard to any under- valuation of the stock which may have been or may be proved to have been made. The High Court was of opinion that the companyering letter formed part of the method of accounting employed by the assessees within the meaning of s. 13 of the Act and that the Income-tax Officer was number entitled to split up the method of accounting and to regard the profit and loss account apart from the companyering letter that the Income-tax Officer had only accepted a portion of the method, without taking the method as a whole, which he was number entitled to do. It, therefore held that the matter was still at large for the proper decision of the Income-tax Officer and accordingly answered the amended question in the negative. The Commissioner of Income-tax then carried an appeal to the Privy Council and their Lordships found themselves unable to agree with the view of the High Court as to the meaning of s. 13 of the Act and they were of the opinion that the section related to a method of accounting regularly employed by the assessee for his own purpose and did number relate to a method of making up the statutory return for assessment to income-tax. Secondly, the section clearly made such a method of accounting a companypulsory basis of companyputation unless in the opinion of the Income-tax Officer the income, profits and gains cannot properly be deduced therefrom. The duty of the Income-tax Officer was to determine whether it was possible to deduce the true profits from the account and the judgment of the Income-tax Officer under the proviso must be properly exercised. Their Lordships laid it down that it is the duty of the Income-tax Officer where there is a method of accounting regularly employed by the assessee number to prima facie, accept the profits and gains shown by the assessee but to companysider whether the income, profits and gains can properly be deduced therefrom and to proceed according to his judgment on the question. On the facts of the case before them their Lordships were of the opinion that the Income-tax Officer acted on the same view as that expressed by the Appellate Assistant Commissioner, and did number perform the duty above stated. In so far as the facts showed that the method of accounting regularly employed by the assessees did number show the true income, profits or gains, the question was further amended by them as follows Whether in view of the provisions of See. 13 of the Income Tax Act or otherwise, the Income-tax Officer was right in companyputing for the purpose of See. 10 of that Act, the income, profits and gains in accordance with the method of accounting regularly employed by the assessee when that method in fact does number show the true income, profits and gains and was answered in the negative. Their Lordships further observed that it would then be for the Income-tax Officer to proceed to the proper discharge of his duty under s. 13 in the light of the opinion therein expressed and reach a proper decision with reference thereto. This case discards the view that it is prima facie duty of the Income-tax Officer companycerned to accept the profits shown by the assessees accounts where there is a method of accounting regularly employed by the assessee and it lays down that it is his duty where there is such a method of accounting to companysider whether the income, profits and gains can be properly deduced therefrom. It is incumbent on the Income-tax Officer to companye to a determination on that question and if he forms the opinion that the method of accounting is such that the income, profits and gains of the assessee cannot properly be deduced therefrom he is bound to reject such method of accounting and make a companyputation upon such basis and in such manner as he may determine. The Income-tax Officer has to apply his mind to this aspect of the question and companye to his own determination in that behalf and if he does number do so and merely accepts the profits shown by the accounts even though in fact the method of accounting regularly employed by the assessee does riot show the true income, profits and gains, he is in error and his action in thus accepting the method of accounting is liable to be set aside at the instance of the higher Tribunal. This leaves open however the question whether if the higher Tribunal companyes to that companyclusion, it will be open to the higher Tribunal to substitute its opinion for that of the Income-tax Officer companycerned and proceed to assess the assessees applying the proviso to s. 13 of the Act. Their Lordships of the Privy Council in the case before them did number do anything of the kind and observed that it would be then for the Income-tax Officer himself to proceed to the proper discharge of his duty under s. 13 of the Act in the light of the opinion expressed in their judgment. They did number send back the case either to the Commissioner of Income-tax, Bombay or to the Assistant Commissioner of Income-tax but after having answered the amended question in the negative simply stated that the Income-tax Officer would doubtless proceed to reach a proper decision in behalf of the applicability of the proviso to s. 13 of the Act having regard to his experience in the preceding years of assessment. They neither left that duty to be performed by the Commissioner of Income-tax number by the Assistant Commis- sioner of Income-tax but referred the performance of that duty to the proper authority who was the Income-tax Officer who alone was invested with the duty of performing it under the terms of the proviso to s. 13 of the Act. Certain decisions bearing on the interpretation of s. 33B of the Act were referred to in this companytext and reliance was placed on certain observations companytained therein in regard to the powers vested in the Appellate Assistant Commissioner while hearing appeals filed before him by the assessee. Vide Commissioner of Income-tax v. Tejaji Farasram Kharawala 1 Commissioner of Income-tax v. Amritlal Bhogilal Co., 2 and Smt. Durgabatti and Smt. Narmadabala Gupta v. Commissioner of Income-tax, Bihar and Orissa 3 . It may be remembered that the Revenue has number been given any right of appeal before the Appellate Assistant Commissioner against the assessment order passed by the Income-tax Officer. It is only the assessee who has such a right companyferred upon him under s. 30 of the Act. When the Appellate Assistant Commissioner however hears such appeal though at the instance of the assessee, the Income-tax Officer is given the right to be heard, either in person or by a representative, who appears before the Appellate Assistant Commissioner to justify the assessment order passed by him. The Legislature in its wisdom has number given a substantive right to the Revenue to carry an appeal against the order of the Income-tax Officer. The decision of the Income-tax Officer is qua the Revenue invested with a finality and the Income-tax Officer is number regarded as a party aggrieved against 1 1953 23 I.T.R. 412. 2 1953 23 I.T.R. 420. 3 1956 30 I.T.R. 101. his own decision. He in fact represents the Revenue and there is numberquestion therefore of his ever being able to question his own decision which is companysidered to all intents and purposes a proper decision given by him having regard to all the circumstances of the case. The assessee is the only person who is given the right of appeal against the decision of the Income-tax Officer. If the assessee does number choose to exercise this right of appeal, the decision of the Income-tax Officer acquires a finality both qua the Revenue and himself but if the assessee chooses to exercise the same, the appeal is heard by the Appellate Assistant Commissioner. The Income-tax Officer is as aforesaid, then given the right to be heard either in person or by a representative. There also the companytest is between the Revenue on the one hand and the assessee on the other. The powers which are vested in the Appellate Assistant Commissioner while hearing such appeals are statutory powers companyferred upon him by S. 31 of the Act and in the exercise of these powers the Appellate Assistant Commissioner may in the case of an order of assessment a companyfirm, reduce, enhance or annul the assessment, or b set aside the assessment and direct the Income-tax Officer to make a fresh assessment after making such further enquiry as the Income- tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income-tax Officer shall thereupon proceed to make such fresh assessment. and determine where necessary the amount of tax payable on the basis of such fresh assessment. If the Appellate Assistant Commissioner chooses to exercise the powers companyferred upon him under the first alternative and enhance the assessment he is enjoined by the proviso to s. 31 3 of the Act to give to the Appellant a reasonable opportunity of showing cause against such enhancement. There are numberdoubt limit. lions grafted on this power of the Appellate Assistant Commissioner but these limitations have to be found from the very nature of the proceedings themselves. These limitations will be indicated at the appropriate place hereafter. The High Court of Bombay numberdoubt expressed the opinion in the Commissioner of Income-tax v. Amritlal Bhogilal Co. 1 As pointed out in the last reference, the object of enacting section 33B was to companyfer a power upon the Commissioner in the interest of revenue to revise orders of the Income-tax Officer which companyld number be revised under any circumstances if the assessee did number appeal from those orders. However erroneous the order of the Income-tax Officer may be, however prejudicial to the Revenue, the assessee by refusing to exercise his right of appeal companyld make that order companyclusive. In order to fill up this obvious lacuna the Legislature enacted Section 33B. But once the assessee has appealed, there is numberdifficulty whatsoever in the way of the department in agitating any question before the Appellate Assistant Commissioner which in its opinion should be agitated and decided in the interest of public revenue. Now, it is clear that when an appeal is pending before the Appellate Assistant Commissioner, the Income-tax Officer has the right to be heard either in person or by a representative, and the very point which the Commissioner has taken and on which he has given his decision under section 33B companyld have been urged under the directions of the Commissioner before the Appellate Assistant Commissioner. It is only when numberremedy is open to the Commissioner to revise the order of the Income-tax Officer that this jurisdiction under section 33B arises. But when a legal remedy is given to him to get the orders of the Income-tax Officer revised, he cannot requisition to his aid the power companyferred upon him under section 33B. Once the appeal with regard to the year 1949- 50 was pending before the Appellate Assistant Commissioner, the Commissioner was given the full right to get the order of the Income-tax Officer revised in any manner he thought necessary in the interest of public revenue. These are however observations only with regard to the companystruction of s.33B of the Act and do number throw any light on the nature and scope oft he powers vested in the Appellate Assistant Commissioner under s. 31 of the Act, much less do they throw any light on the nature and scope of the power vested in express terms in the Income-tax Officer under the proviso to s. 13 of the Act of rejecting the method of accounting regularly employed by the assessee if in his opinion the method of accounting is such that the income, profits and gains cannot properly be deduced therefrom. This decision does number help the appellant in its companytention that if the Income-tax Officer has number in fact done so it will be open to the Appellate Assistant Commissioner while hearing an appeal filed before him by the assessee to exercise such power in the first instance. The position companytended for by the appellant as emerging from the decision of the High Court of Bombay just referred to is companytrary to the one which was enunciated by the learned judges of the High Court of Bombay in K. F. Vakeels Case supra . I am clearly of the opinion that the learned judges of the High Court of Bombay did number intend to lay down any such position. In fact, in the later unreported decision of theirs in M s. Narrondas Manordass, Bombay v. The Commissioner of Income- tax, Bombay 1 the learned judges of the High Court of Bombay laid down that however wide in terms the powers companyferred upon the Appellate Assistant Commissioner under s. 31 of the Act may have been worded, they are number absolute but are circumscribed by the very nature of the proceedings themselves. The learned judges in that companytext observed Now, in order to understand what the companypetence of the Appellate Assistant Commissioner is and what are the powers companyferred upon the Appellate Assistant Commissioner, it is necessary to bear in mind certain salient facts. It is only the assessee who has a right companyferred upon him to prefer an appeal against the order of assessment, passed by the Income-tax Officer. If the assessee does number choose to appeal, the order of assessment becomes final subject to any power 1 1957 31 I.T.R. 909 of revision that the Commissioner might have under s.33-B of the Income-tax Act. Therefore,it would be wholly erroneous to try and companypare the powers of the Appellate Assistant Commissioner with the powers possessed by a Court of Appeal, under the Civil Procedure Code. The Appellate Assistant Commissioner is number an ordinary companyrt of appeal in the sense in which that expression is understood in the Civil Procedure Code. It is impossible to talk of a companyrt of appeal when only one party to the original decision is entitled to appeal and number the other party, and in view of this peculiar position occupied by the Appellate Assistant Commissioner, the Legislature, as we shall presently point out, has companyferred very wide powers upon the Appellate Assistant Commissioner once an appeal is preferred to him by the assessee. If the assessee chooses to remain companytent with the order of the Income-tax Officer there is numberhing that the Appellate Assistant Commissioner can do, however erroneous the assessment may be but if the assessment is opened up by the action of the assessee himself, then the powers companyferred upon the Appellate Assistant Commissioner are much wider than the powers of an ordinary Court of appeal. The statute provides that once an assessment companyes before the Appellate Assistant Commissioner his companypetence is number restricted to examining those aspects of the assessment which are companyplained of by the assessee his companypetence ranges over the whole assessment and it is open to him to companyrect the Income-tax Officer number only with regard to a matter which has been raised by the assessee but also with regard to a matter which has been companysidered by the Income-tax Officer and determined in the companyrse of assessment. It is clear t at the Appellate Assistant Commissioner has been companystituted a revising authority against the decision of the Income-tax Officer a revising authority number in the narrow sense of revising what is the subject matter of the appeal, number in the sense of revising those matters about which the assessee makes once the appeal is before him he can revise number only the ultimate companyputation arrived at by the Income-tax Officer but he can revise every process which led to the ultimate companyputation or assessment. In other words, what he can revise is number merely the ultimate amount which is liable to tax, but he is entitled to revise the various decisions given by the Income-tax Officer in the companyrse of the assessment and also the various incomes or deductions which came in for companysideration of the Income-tax Officer. The learned judges then cited with approval the observations of the Patna High Court in Jagarnath Therani v. Commissioner of Income-tax 1 Now this section section 31 3 relating to appeals is enacted for the benefit of the subject and also, to the limited extent therein stated, for the benefit of the Crown. But the subject-matter of the appeal is the assessment and the scope of the appeal must, in my opinion, be limited by the subject-matter. The appellate authority has numberpower to travel beyond the subject-matter of the assessment, and, for all the reasons advanced by the appellant, is in my opinion, number entitled to assess new sources of income. the observations of the High Court of Madras in Gajalakshmi Ginning Factory v. Commissioner of Incometax 2 approved by the Patna High Court in Bishwanath Prasad Bhagwat Prasad Commissioner of Income-tax 3 at p. 758 Of companyrse, it would number be open to the Appellate Assistant Commissioner to introduce into the assessment new sources, as his power of enhancement should be restricted only to the income which was the subject matter of companysideration for purposes of assessment by the Income-tax Officer. and their own observations in an unreported judgment of theirs in Sharrif Jima Co. Ltd., Mombassa v. Commissioner of Income-tax, Bombay City 4 When the Appellate Assistant Commissioner exercises his power of enhancement, be is dealing with 1 1925 2 I.T.C. 4, 8. 3 1956 29 1 T. R. 748. 2 1952 22 I.T.R. 502, 510. the subject-matter of appeal before him, and enhancement is companyfined to the sources or items in respect of which the assessment has been made by the Income-tax Officer. After companysidering the various authorities cited above the learned judges finally came to the companyclusion We do number think it can be seriously disputed that those powers, are very wide and unfettered, but the only question before us is whether there is any limitation upon those powers, and if there is any limitation upon those powers, what is the nature and character of the limitation. It is number as if the Appellate Assistant Commissioner has companypletely unqualified powers his powers are limited to the subjectmatter of the assessment and we have attempted to define what the subject-matter of the assessment is. It follows from the above that even though the powers of the Appellate Assistant Commissioner in the matter of enhancement of the assessment provided in s. 31 3 of the Act are number circumscribed by any limitation thereupon and are as wide as wide can be, there are well-recognized limitations on the same, one of which has been rightly accepted by the learned judges of the High Court of Bombay in their unreported decision above referred to. It number remains to companysider whether there is any other limitation on such powers of the Appellate Assistant Commissioner to be found in the provisions of s. 13 of the Act and the proviso thereto. It is clear that number much light is thrown on this question by the authorities directly bearing on the companystruction of s. 13 of the Act above referred to except the observations of the learned judges of the High Court of Bombay in K. F. Vakeels Case, supra . This judgment of the learned judges of the High Court of Bombay has number been dissented from either in Bombay or else where and stands unchallenged and would prima facie go to establish the position canvassed before us by the assessee that it is the Income-tax Officer and the Income-tax Officer alone who is invested with the power to determine whether the method of accounting employed by the assessee is such that the income, profits and gains of the assessee cannot properly be deduced therefrom. Not much help can be derived also from the companyparison of the various provisions of the Act where the Income-tax Officer is vested with the power of arriving at the determinations on his own, viz., Section 4A a iv ,s. 10 5 , s. 12B 2 , s. 22 2 , s. 22 4 , s. 23 2 , s. 23A,s. 34 and s. 42 2 or where there are several authorities named besides the Income-tax Officer for arriving at determinations of the relative questions, viz., s. 28 1 and 2 , s. 37, s. 38, s. 48, and s. 49E of the Act with the provisions companytained in s. 13 and the proviso thereto. It is number necessary to probe into the reasons for the enactment of these several provisions by the Legislature in the manner therein stated. It is sufficient for the present purpose to scrutinise the provisions of s. 13 itself and reach a companyclusion on the express terms thereof. Turning then to the provisions of s. 13 itself, one finds that the main provision thereof enacts the rule that income, profits and gains shall be companyputed for the purpose of ss. 10 and 12 in accordance with the method of accounting regularly employed by the assessee. If the matter stood there the imperative character of this provision would entail upon the Income-tax Officer and upon all the income- tax authorities in the hierarchy to accept that method of accounting for the companyputation of income, profits and gains of the assessee for the purpose of ss. 10 and 12 of the Act. This method of accounting though regularly employed by the assessee is however number invested with a sacrosanct character and is subject to the proviso enacted in s. 13 and it is that if numbermethod of accounting has been regularly employed or if the method employed is such that in the opinion of the Income-tax Officer the income, profits and gains cannot properly be deduced therefrom, then the companyputation shall be made upon such basis and in such manner as the Income-tax Officer may determine. Two companyditions are thus attached to the rejection of the method of accounting regular employed by the assessee and they are expressed in different phraseology i if numbermethod of accounting has been. regularly employed and ii if the method employed is such that in the opinion of the Income-tax Officer the income, profits and gains cannot properly be deduced therefrom. It is to be numbered that these two companyditions are companyched in quite different terms. In the case of the first companydition, the mere fact of numbermethod of accounting having been regularly employed is enough to bring the proviso into operation but in the case of the second companydition the Income-tax Officer has to form an opinion that the method of accounting is such that the income, profits and gains cannot properly be deduced therefrom before the proviso can ever companye into operation. The determination of the Income-tax Officer companycerned to that effect is the companydition of the rejection by him of the method of accounting regularly employed by the assessee and unless and until he companyes to that companyclusion he cannot reject the same and companypute the income, profits and gains of the assessee upon such basis and in such manner as he may determine. The difference in the language of these two companyditions is advisedly adopted by the Legislature. The fact that numbermethod of accounting has been regularly employed by the assessee would be obvious to any Income-tax Officer merely on a perusal of the statement of account furnished b the assessee and would number require any mental process which can be properly described as a determination. The mental process involved, however, in the case of the second companydition is of a much more elaborate character and the Income-tax Officer has to apply his mind to the question whether even though the method of accounting has been regularly employed by the assessee, such income, profits and gains cannot properly be deduced therefrom. Here the Income-tax Officer companycerned has to form a definite opinion on the question and if he companyes to the companyclusion that the income, profits and gains of the assessee cannot properly be deduced from the method of accounting regularly employed by him the proviso at once companyes into operation. He is entitled to reject assessee and companypute the income, profits and gains of the assessee upon such basis and in such manner as he may determine. This is number the mental process of the nature required for the fulfilment of the first companydition. It is the application of mind to the question whether income, profits and gains of the assessee can be properly deduced from the method of accounting regularly employed by the assessee and the Income-tax Officer has to companye to the companyclusion that it cannot be so done. This determination is under the terms of the proviso itself a determination of the Income-tax Officer himself and of numberother authority in the hierarchy of the Income-tax Officers. It may be numbered that the term Income-tax Officer has been defined in s. 2 7 of the Act as distinct from the term Appellate Assistant Commissioner defined in s. 2 3 of the Act. The Income-tax Officer, the Appellate Assistant Commissioner and the Inspecting Assistant Commissioner are separate entities each with a jurisdiction of its own and the one cannot by any chance be interpreted to mean the other. If, therefore, the proviso to s. 13 of the Act talks of the Income-tax Officer, it is the Income-tax Officer alone as defined in s. 2 7 of the Act and number the Appellate Assistant Commissioner as defined in s. 2 3 of the Act or any other officer in the hierarchy of Income-tax Officers. Such an interpretation would involve the deletion number only of the term Income-tax Officer from the proviso to s. 13 but also the absolute negation of the expression in the opinion of the Income- tax Officer mentioned therein. I for one cannot ascribe to the Legislature any negligence or oversight number can I impute to it any intention to use these words as though they were superfluous or redundant. The words used by the Legislature must be given their full effect and significance and the only way in which these words can be companystrued is to ascribe to the Legislature the intention to make the determination by the lncome-tax Officer a companydition of the proviso being brought into operation, with the necessary companysequences of the rejection of the method of accounting regularly basis and in such manner as the Income-tax Officer himself may determine. To that extent the decision of the High Court of Bombay in F. Vakeel v. Commissioner of Incometax E. P. Tax 1 would appear to be companyrect. It is however urged that this interpretation would involve the necessary companysequence that the determination of the Income-tax Officer within the proviso to s. 13 of the Act would be final so far as the Revenue was companycerned as it had numberright to appeal against the determination of the Income- tax Officer, whereas the assessee would have the right under s. 30 of the Act to carry an appeal before the Appellate Assistant Comniissioner and such a result companyld certainly number have been companytemplated by the Legislature while enacting this measure. It is also companytended that once the assessee carries an appeal before the Appellate Assistant Commissioner he himself destroys the finality of the determination made by the Income-tax Officer and the whole matter is at large so much so that even though the Revenue companyld number have preferred an appeal on its own, once the appeal is entertained by the Appellate Assistant Commissioner it would be able to urge any and every ground including the one which would bring the case within the proviso to s. 13 of the Act even though the Income-tax Officer had number entertained the same in the first instance. The first companytention is wholly untenable for the simple reason that when proceedings are entertained by the Income- tax Officer, he represents the Revenue and the companytest then is between the Revenue as represented by him on the one hand and the assessee on the other. If the Revenue itself decides the question in a particular manner in the process of assessment, it cannot legitimately be heard to say that it has number been given any right of appeal against the decision of the Income-tax Officer who represents it fully all the way. The party aggrieved by the decision of the Income-tax Officer can only be one and that is the assessee, the Revenue having decided the question in its on favour. The assessee only can in the circum- stances, therefore be given the right of appeal against the decision of the Income-tax Officer. Even when the assessee files an appeal before the Appellate Assistant Commissioner, the Revenue is represented by the Income-tax Officer himself who appears before the Appellate Assistant Commissioner either in person or by a representative. So, there also the Revenue is fully represented and has its full say at the hearing of the appeal before the Appellate Assistant Commis- sioner and the only say which it can ever have would be to support the decision which has been given in the first instance by the Income-tax Officer who is its representative in the assessment proceedings. No grievance can therefore be made that the Revenue has been companyferred numberright of appeal and that if the assessee does number choose to appeal against the decision of the Income-tax Officer, it has numberredress whatever. It has, in fact, numbergrievance at all which can ever be redressed by the Appellate Assistant Commissioner and if the Revenue cannot by any chance be treated as an aggrieved party the whole of this argument is robbed of significance. It is futile on the part of the appellant therefore to urge that there is finality in one case and numberfinality in the other. The second companytention put forward by the appellant is equally devoid of substance. The powers of the Appellate Assistant Commissioner are statutory and they are to be found in the four companyners of s. 31 of the Act. The nature and scope of these powers have been already discussed above and these powers are number absolute in character but are circumscribed in the manner indicated in the judgment of the High Court of Bombay above referred to. The Income-tax Officer who appears before the Appellate Assistant Commis- sioner either in person or by his representative is companycerned to support his own decision and therefore lie cannot be ever heard to say that the decision which he has reached in the matter of the proviso to s. 13 of the Act is wrong in any manner whatever. The Appellate Assistant Commissioner even though he is exercising these appellate powers, cannot on its own accounting regularly employed by the assessee is such that the income, profits and gains of the assessee cannot be properly deduced therefrom. He can only arrive at the companyclusion on the record before him and on the materials presented before him by the assessee as well as the Income- tax Officer appearing before him either in person or by a representative that the companyclusion which has been reached by the Income-tax Officer within the terms of the proviso to s. 13 of the Act is number proper and if he companyes to that companyclusion the only thing that be can do is to set aside the assessment within the meaning of s. 31 3 b of the Act avid direct the Income-tax Officer to make a fresh assessment after making such further enquiry which the Income-tax Officer thinks fit or he, the Appellate Assistant Commissioner, may direct. He has numberjurisdiction to arrive at a determination of his own as to the method of accounting regularly employed by the assessee being such that the income, profits and gains of the assessee cannot properly be deduced therefrom. That is the function of the Income-tax Officer by the very terms of the proviso to s. 13 itself and he cannot arrogate that function to himself by abrogating or setting at naught the express terms of the proviso to s. 13 which lay down that the power of rejection of the method of accounting regularly employed by the assessee and companyputation of the income, profits and gains of the assessee upon such basis and in such manner as the Income-tax Officer himself may determine is only vested in the Income-tax Officer as defined in s. 2 7 of the Act. The power of enhancement of the assessment companyferred upon the Appellate Assistant Commissioner under s. 31 3 a cannot be companystrued to mean that the Appellate Assistant Commissioner can on his own exercise such power within the meaning of the proviso to s. 13 even though the Income-tax Officer himself has number done so in the first instance. The powers companyferred upon the Appellate Assistant Commissioner under s. 31 3 a have got to be read with this further limitation that even though he can enhance the assessment, he cannot do so by exercising the in the Income-tax Officer companycerned under the proviso to s. 13 of the Act. Section 31 3 of the Act has got to be read harmoniously with the provisions of s. 13 and the proviso thereto and if they are so read the only companyclusion to which one can arrive is that even though the Appellate Assistant Commissioner exercises the wide powers companyferred upon him under s. 31 3 of the Act, he cannot abrogate or set it naught the express power which is vested in the Income-tax Officer under the proviso to s. 13 of the Act. The learned Solicitor-General urged that if the proviso to s. 13 of the Act was so interpreted it would number only deprive the Appellate Assistant Commissioner of the power to bring the proviso to s. 13 of the Act into operation in a proper case but would also deprive the Commissioner of the power which he has to revise the Income-tax Officers order of assessment under s. 33B of the Act. As already indicated, the Court is number companycerned here with the interpretation of s. 33B of the Act and it may also be numbered that there was numbersuch provision to be found in the Act as it stood at the relevant period. Assuming, however, that the power of the Commissioner to revise the Income-tax Officers orders under s. 33B of the Act has to be companysidered in this companytext, there is numberhing in the terms of that section which militates against the companyclusion arrived at on the companystruction of the proviso to s. 13 of the Act. If the Commissioner companysiders that any order passed in the record of any proceedings under the Act by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, it is open to him after giving the assessee an opportunity of being heard as he deems necessary to pass such orders thereon as the circumstances of the case justify. If he companyes to the companyclusion that the Income-tax Officer companycerned is in error in the matter of accepting the method of accounting regularly employed by the assessee and ought to have companye to the companyclusion that the method of accounting employed is such that the income, profits and gains cannot properly be deduced therefrom, it would be open to the Commissioner to record that opinion of his and pass an order cancelling the assessment and directing a fresh assessment which would be within his companypetence and would be the only order thereon which the circumstances of the case would justify. No injustice would be done to the Revenue. The ends of justice would be equally served if the Commissioner in such a case makes an order cancelling the assessment and directing a fresh assessment and remands the case back to the Income-tax Officer with a direction to apply his mind properly to the facts of the case and determine the question which is within his exclusive province under the terms of the proviso to s. 13 of the Act. I cannot see any difficulty of the type envisaged by the learned Solicitor-General and am of opinion that this companytention of the appellant also must be negatived. I am, therefore, of opinion that the companyclusion reached by the High Court of Bombay in the instant case was companyrect and the referred questions Nos. 1 and 2 were rightly answered by the High Court in the, negative. As stated by the High Court the question No. 3 did number arise for companysideration at all and I would, therefore, dismiss the appeal with companyts. BY THE COURT.-In accordance with the judgment of the majority, the appeal will be allowed.

Case appeal was accepted by the Supreme Court

ORIGINAL JURISDICTION Civil Miscellaneous Petition No. 915 of 1957. Appeal under Order V, rule 3 of the Supreme Court Rules. V. S. Mani and Ganpat Rai, for the petitioner. 1957. October 14. The following Judgment of the Court was delivered by VENKATARAMA AIYAR J.-This is a petition under Art. 71 1 of the Constitution of India. On May 6, there was an election to the office of the President and Shri Rajendra Prasad was declared elected. Thereafter Dr. N. B. Khare filed the present petition describing himself as an intending candidate and alleging that there had been violations of the provisions of the Constitution and that the election was in companysequence number valid. The prayers in the petition are that grave doubts that exist in companynection with the Presidential election be enquired into, resolved and decided and the entire proceedings of the Presidential election be quashed as void . The Registrar of this Court returned the petition as number being in companyformity with the provisions of the Presidential and Vice-Presidential Elections Act, 1952 XXXI of 1952 , and as number satisfying the requirements of the Rules of this Court companytained in 0. XXXVII-A Section 14 of Act XXXI of 1952 provides that numberelection shall be called in question except by an election petition presented to the Supreme Court in accordance with the provisions of the Act and of the Rules made by the Supreme Court under Art. 145 of the Constitution and it further provides that it should be presented by any candidate at such election or by ten or more electors. The Rules framed by this Court with reference to this matter are companytained in 0. XXXVII-A. Rule 3 prescribes that a companyrt-fee of the value of Rs. 250 should be paid on the petition and r. 12 requires the petitioner to deposit a sum of Rs. 2,000 in cash as security for the payment of companyts that may become payable by him. The petitioner is number a person entitled to apply under s. 14 of the Act and his petition was also defective as it did number companyply with the requirements of rr. 3 and 12. It was accordingly returned by the Registrar. Against that order, the present appeal has been brought. It is firstly companytended by Mr. Mani that the present petition is outside the purview of Act XXXI of 1952 and of XXXVII-A of the Supreme Court Rules. It is argued that the Supreme Court is invested with jurisdiction to enquire into and decide all doubts and disputes arising out of or in companynection with the election of the President, that Act XXXI of 1952 and O. XXXVII-A apply only when there is a dispute as to the election, but where the petition is founded upon doubts as to the validity of the election, it is number companyered either by the Act or the Rules. We are unable to accept this companytention. When once an election has been held, any doubt companycerning its validity is material only as a ground for setting aside the election and that in fact is the prayer in the petition itself In substance the petition is one calling the election in question and it must satisfy the requirements of Act XXXI of 1952 and of the Rules in 0. XXXVII-A. It is next companytended that the Act and the Rules in question are void on the ground that they derogate from the jurisdiction of the Supreme Court to enquire into and decide all disputes and doubts arising out of or in companynection with the election of the President or the Vice-President. It is argued that under s. 18, the election companyld be set aside only on certain grounds and that further under clause b it companyld be done only if the result of the election is shown to have been materially affected, and that these are restrictions on the jurisdiction companyferred by Art. 71 1 and are ultra vires. Article 71 1 merely prescribes the forum in which disputes in companynection with the election of the President and Vice-President would be enquired into. It does number prescribe the companyditions under which the petition for setting aside an election companyld be presented. Under Art. 71 3 , it is Parliament that is authorised It make law for regulating any matter relating to or companynected with the election of the President or Vice President, and Act XXXI of 1952 has been passed by Parliament in accordance with this provision. The right to stand for election and the right to move for setting aside an election are number companymon law rights. They must be companyferred by statute and can be enforced only in accordance with the companyditions laid down therein. The companytention that the Act and the Rules derogate from the jurisdiction of the Supreme Court under Art. 71 1 must accordingly be rejected. The petitioner has, therefore, numberright to move for setting aside the election except in accordance with the provisions of Act XXXI of 1952. And finally it is companytended that the petitioner has a right as a citizen to approach this Court under Art. 71 1 whenever an election has been held in breach of the companystitutional provisions. For the reasons already given, this companytention must fail. The right of a person to file an application for setting aside an election must be determined by the statute which gives it, and that statute is Act XXXI of 1952 passed under Art. 71 3 . The petitioner must strictly bring himself within the four companyners of that statute and has numberrights apart from it.

Case appeal was rejected by the Supreme Court

Kapur, J. Bhagwandas and Netram are two brothers who along with Mt. Rameshwari, a daughter of the former, were tried by the Sessions Judge of Ganganagar for an offence under s. 302 of the Indian Penal Code but were acquitted. On appeal to the High Court of Rajasthan, the order of acquittal of Bhagwandas and Netram was reversed and they were companyvicted under s. 302 read with s. 34 and sentenced to transportation for life. The order as to Mt. Rameshwari was affirmed and she was acquitted. The companyvicted persons have obtained Special Leave to appeal under Art. 136 of the Constitution. The appeal is founded on two grounds 1 that there was numberevidence against the appellants sufficient to warrant a companyviction and 2 that there were numbercompelling reasons for reversal of the judgment of acquittal. According to the prosecution the canal after a temporary closure restarted flowing on May 5, 1953. And although it was number his turn of water the deceased Shivlal was allowed to take the water to irrigate his fields. On May 6 the canal was flowing to its full capacity and Shivlal was to take his turn of water which was of 6 hours duration from 8 a.m. to 2 p.m. but he watered his lands from 8 a.m. to 10-30 a.m. because the village diggi pond which was empty had to be filled up. Mirab Ram Karan P.W. 1 with the companysent of Shivlal diverted the water for the purpose of filling up the diggi, promising him Shivlal to get him the rest of his turn of water, i.e. for 3 1/2 hours after the diggi had been filled up. The diggi was filled up by 1 p.m. on the 7th. Shivlal then wanted to divert the water into his field but Bhagwandas prevented him from doing so claiming the turn to be his. According to Ram Karan Mirab P.W. 1 the turn of Bhagwandas was after Surta whose turn was next to that of Shivlal. As Shivlal was prevented from taking his turn of water he started walking towards the village saying that he would go and speak to Mirab. Bhagwandas thereupon shouted that the enemy was going and hit Shivlal on the head with a kassi. Netram then hit Shivlal with lathi as a result of which he fell down and then both beat Shivlal, and Mt. Rameshwari also, it was alleged, joined in this beating with a wooden handle of a kassi. This occurrence was witnessed by Hazari P.W. 3 who was grazing his camels in the field of Surta. He went up to the place where the beating was going on and shouted to the assailants who went away leaving their kassi behind. Hazari found Shivlal seriously injured and unconscious. He sprinkled some water on his face which revived Shivlal and the latter asked Hazari to take him to the Thana but Hazari helped him to walk up to the Khala threshing floor of Hukma which was at a short distance from that place. Hazari P.W. 3 has stated that he left Shivlal with Jora, Jagmal, Bhogar, Begaram and Binja, and on their asking him he Hazari told them what he had seen. Shivlal was then taken to Raisinghnagar by Bhaggu and Jagmal on a she-camel to the shop of Gyani Ram P.W. 4. There Shivlal told Gyani Ram also that Bhagwandas, Netram and Rameshwari had assaulted him because of the water dispute and also asked Gyani Ram to send for his son Ram Pratap and his Artya Commission Agent Ishardas. Ram Pratap came at about 6 p.m. Shivlal repeated the story to him and was then taken to the hospital by Jagmal, Bhaggu and others. At the hospital he was treated by the doctor P.W. 11 but died the following day 8th at 8-15 a.m. The First Information Report was based on a written report Ex. P-1 by Ram Pratap s o Shivlal. It was recorded on May 7 at about 7-30 p.m. The prosecution supported their case by the evidence of two eye witnesses, dying declarations made to 3 persons and on the recovery of the kassi. They produced two eye witnesses Begaram P.W. 2 and Hazari P.W. 3. The dying declarations were made to three persons first to Jora P.W. 7, later to Gyaniram P.W. 4 at his shop and lastly to Ram Pratap P.W. 5 who arrived at the shop at 6 p.m. If the dying declaration was made to this witness it must have been at that time. According to the doctors evidence Shivlal was unconscious when he was brought to the hospital at 5 p.m. He had 15 injuries on his body, out of which injury No. 1 was with a sharp-edged weapon and injury No. 2 with a blunt weapon and both these injuries were grievous and were individually and companylectively fatal sufficient to cause death. The learned Sessions Judge disbelieved the whole evidence and acquitted the accused. He was of the opinion that the evidence produced by the prosecution was number free from suspicion and number sufficient to companyvict them. Begaram P.W. 2 was disbelieved both by the Sessions Judge and the High Court. The learned Sessions Judge described Hazari as a facile fluent liar but his testimony was accepted by the High Court. Both companyrts rejected the statement of Ram Pratap but the statements of Gyaniram and Jora were accepted by the High Court although they were rejected by the Sessions Judge. The High Court has relied upon the testimony of one eye witness Hazari P.W. 3 and two witnesses before whom Shivlal is alleged to have made two dying declarations. There are apparent companytradictions between the testimony of Hazari and Bega. The learned High Court Judges disposed of this by saying that Begas presence. on the spot is open to grave doubts. As such it is, in our opinion, number proper to companytradict the statement of a man who was present on the spot by using the statement of another man who was in all probability number there. The learned Judges have made the following significant observation in regard to Hazari It seems to us that Hazari had said this because the prosecution was producing Bega, and he must have been asked to say that Bega was also present. So far as the story of Hazari about the incident itself is companycerned, numberhing has been brought out in his cross-examination to throw doubts on this part of his statement. They also pointed out, but attached numberimportance, to other companytradictions in the statements of Hazari made before the trial companyrt and before the Police. If as observed by the learned Judges of the High Court, Hazari had mentioned the presence of Bega merely because the letter was to be produced as a prosecution witness and because he Hazari had been asked to mention it, then it would detract so materially from his reliability that it would be dangerous to accept his testimony as being of any great value which is still more diminished by the finding as to the innocence of Mt. Rameshwari. The other piece of evidence which the prosecution relied upon was the two dying declarations made by Shivlal to Gyaniram P.W. 4 and Jora P.W. 7. Besides the infirmities which the testimony of these two witnesses Gyaniram P.W. 4 and Jora P.W. 1 suffered from due to material companytradictions in their respective statements made at various stages of the case and which have been pointed out by the learned Sessions Judge who said about Gyaniram In such a state of affairs I refuse to put any weight and value to the statement of Gyaniram their evidence cannot be a sure foundation for maintaining the companyviction if the statement of Hazari the sole eye witness is disregarded, as it must be disregarded in this case because ordinarily a dying declaration of the kind which the prosecution has relied upon is by itself insufficient for sustaining a companyviction on a charge of murder. The learned Sessions Judge was of the opinion that the evidence of the doctor P.W. 11 made the story that Shivlal companyld walk for a little distance upon the Khala of Hukma or was able to talk so as to make a dying declaration, improbable. But the learned Judges of the High Court disposed of this matter by saying that the doctor was companyparatively young and that his statement was number in accord with the opinion expressed in books on Medical Jurisprudence by authors like Modi and Lyon. But it cannot be said that the opinions of these authors were given in regard to circumstances exactly similar to those which arose in the case number before us number is this a satisfactory way of disposing of the evidence of an expert unless the passages which are sought to discredit his opinion are put to him. This Court in Sundarlal v. The State of Madhya Pradesh disapproved of Judges drawing companyclusions adverse to the accused by relying upon such passages in the absence of their being put to medical witnesses. The learned Judges of the High Court were, therefore, in error in accepting the testimony of these witnesses in support of the companyrectness of the two dying declarations number companyld the statement of the deceased alleged to have been made in the circumstances of this case be companysidered sufficient to support the companyviction of the accused. The recovery of the kassi is a wholly neutral circumstance because it has number been proved that it belonged to Bhagwandas. Although this Court will number interfere with the findings of the High Court because its companyclusions on the evidence as to the guilt or innocence of the accused differ from that of the High Court, yet where the evidence is such that numberTribunal companyld legitimately infer from it that the accused is guilty this companyrt would set aside the companyviction. The Judicial Committee of the Privy Council in Stephen Seneviratne v. The King A.I.R. 1936 P.C. 289, 299 in setting aside an order of companyviction said there are here numbergrounds on the evidence, taken as a whole, upon which any Tribunal companyld properly, as a matter of legitimate inference, arrive at a companyclusion that the appellant was guilty In our view the evidence in the present case is of such quality and numberlegitimate inference of guilt of the accused companyld properly be drawn. The second point on which the judgment of the High Court is assailed is the lack of companypelling reasons for setting aside the judgment of acquittal. This companyrt has held that the High Court should number set aside an acquittal unless there are substantial and companypelling reasons for doing so. Surajpal Singh v. State 1952 S.C.R. 193, 201, Ajmer Singh v. The State of Punjab 1953 S.C.R. 418, 423, Aher Raja Khima v. The State of Saurashtra . The judgment of the High Court does number disclose any such reasons justifying interference with the findings of the trial Court.

Case appeal was accepted by the Supreme Court

Imam, J. The respondent Jagan Nath filed a petition under Art. 226 of the Constitution in the Punjab High Court which was allowed. The High Court ordered the respondent The Union of India and the appellant Sohan Lal to forthwith restore possession of house No. 35 situated in West Patel Nagar, Delhi to Jagan Nath. Against this order of the High Court the appellant applied for and obtained special leave to appeal to this Court. Jagan Nath is a displaced person and a refugee from Pakistan. The Government of India had devised various schemes for the rehabilitation of refugees. One of these was a scheme for sale of certain houses companystructed by the Government of India for refugees in West Patel Nagar. It was number intended under the scheme to entertain applications from displaced persons who had already been allotted agricultural land in East Punjab. A limited number of houses known as box-type tenements were companystructed. According to the procedure prescribed in order to give effect to the scheme, only those displaced persons, who were registered before the 15th of August, 1948, and were gainfully employed, were eligible for allotment of a house. A displaced person wishing to apply for allotment of a house was required to submit an application in the prescribed form offering to purchase a house in West Patel Nagar. If the applicant was prima facie eligible, he companyld be instructed to deposit the sale price of the house in the treasury, his eligibility to be verified later on. Permission to deposit the sale price did number mean that this eligibility had been accepted. After payment of the sale price the applicant companyld be required to produce proof of his eligibility. A list would be prepared of all the applicants who had deposited the sale price and whose eligibility had been verified. If the number of the applicants was in excess of the available number of houses, those, whose treasury challans bore a later date, would be excluded and their money refunded. The applicants whose names were included in the final list would be required to pay the ground rent by a specified date. A particular house would be allotted to an applicant by drawing lots. Jagan Nath had got himself registered as a refugee on December 31, 1947. He had made his application in the prescribed form. He had deposited the sum of Rs. 5,600 as the sale price after his prima facie eligibility had been accepted. He had also deposited the ground rent for the plot on which the house had been built, having been informed previously that it had been decided to allot him a two-roomed enclosed verandah box-type house in West Patel Nagar. He was informed that the allotment of a particular house would be decided by drawing lots at site on February 15, 1952, at 3 p.m. As the result of the drawing of lots, house No. 35, the property in dispute in this appeal, fell to his lot. According to Jagan Nath, on May 10, 1952, the Accommodation Officer in his absence removed the members of his family along with his entire belongings to the house in dispute in a truck and he and his family thus entered into possession of the house in dispute. Jagan Nath, however, was evicted from the house in dispute on September 27, 1952, by virtue of a warrant of eviction dated September 11, 1952, purporting to have been issued under s. 25 of Ordinance III of 1952. After his eviction, possession of the house in dispute was given to the appellant on October 3, 1952. The appellant, who is also a displaced person, had applied on February 27, 1952, for allotment of a house in West Patel Nagar. He had made the deposit of Rs. 5,600 as sale price and had apparently companyplied with all the necessary companyditions for allotment of a house to him and the house in dispute was allotted to him on July 31, 1952. The appellant has been in possession of the disputed house since October 3, 1952. The appellants main companytention has been that, having regard to the circumstances of the case, the High Court erred in making the order it did which presumably purported to be in the nature of a writ of mandamus. There was a serious dispute on questions of fact between the parties and also whether Jagan Nath had acquired in law any title to the property in dispute. Proceedings by way of a writ were number appropriate in a case where the decision of the Court would amount to a decree declaring Jagan Naths title and ordering restoration of possession. The proper remedy open to Jagan Nath was to get his title declared in the ordinary way in a Civil Court. The alternative remedy of obtaining relief by a writ of mandamus or an order in the nature of mandamus companyld only be had if the facts were number in dispute and Jagan Naths title to the property in dispute was clear. It was further companytended on behalf of the appellant that a writ of mandamus or an order in the nature of mandamus companyld number be made against the appellant, a private individual. He had companye into lawful possession and there was numberevidence of companylusion between him and the Union of India and there was numberfinding by the High Court that the appellant had acted in companylusion with the Union of India as a result of which Jagan Nath was dispossessed of the property in dispute and the same was allotted to him. On behalf of Jagan Nath, it was urged that when he entered into possession of the property in dispute he did number do so as a trespasser. He had been inducted on the property by the Accommodation Officer. He companyld number have been illegally evicted. S. 3 of the Public Premises Eviction Act, 1950 Act No. XXVII of 1950 , required a numberice to be served upon him directing him to vacate the premises within 15 days from the date of the service of the numberice upon him before he companyld be evicted. This was number done and he had been evicted without companyplying with the mandatory provisions of s. 3 of the said Act. His eviction was a high-handed act of the Government without any legal justification whatsoever. The Union of India which had illegally evicted him should be ordered to restore possession of the property in dispute to him and as the eviction was at the instance of the appellant, he should also be directed to restore possession of the said property to Jagan Nath. Reliance was placed upon certain decisions of the High Courts of Punjab in Khushal Singh v. Shri Rameshwar Dayal, Deputy Commissioner, Delhi I.L.R. 1954 Punjab 211, Hyderabad in G. Kistareddy v. Commr. of City Police, Hyderabad A.I.R. 1952 Hyderabad 36 and Pepsu in Mohinder Singh v. State of Pepsu A.I.R. 1955 Pepsu 60, as well as certain observations in the judgment of this Court in the case of Wazir Chand v. The State of Himachal Pradesh in support of the proposition that, as Jagan Nath was in possession and he had been illegally evicted, he was entitled to have property, from which he had been illegally evicted, restored to him. We do number propose to enquire into the merits of the rival claims of title to the property in dispute set up by the appellant and Jagan Nath. If we were to do so, we would be entering into a field of investigation which is more appropriate for a Civil Court in a properly companystituted suit to do rather than for a Court exercising the prerogative of issuing writs. There are questions of fact and law which are in dispute requiring determination before the respective claims of the parties to this appeal can be decided. Before the property in dispute can be restored to Jagan Nath it will be necessary to declare that he had title in that property and was entitled to recover possession of it. This would in effect amount to passing a decree in his favour. In the circumstances to be mentioned hereafter, it is a matter for serious companysideration whether in proceedings under Art. 226 of the Constitution such a declaration ought to be made and restoration of the property to Jagan Nath be ordered. Jagan Nath had entered into a transaction with the Union of India up to a certain stage with respect to the property in dispute, but numberletter of allotment had been issued him. Indeed, he had been informed, when certain facts became known, that the property in question companyld number be allotted to him as he was a displaced person who had been allotted land in East Punjab. As between Jagan Nath and the Union of India it will be necessary to decide what rights were acquired by the former in the property up to the stage when the latter informed Jagan Nath that the property would number be allotted to him. Another question for decision will be whether Jagan Nath was allowed to enter into possession of the property because it was allotted to him or under a misapprehension as the Union of India was misled by the companytents of his application. The case of the Union of India is that under the scheme Jagan Nath was number eligible for allotment of a house in West Patel Nagar, as it was subsequently discovered that he had been allotted, previous to his application, agricultural land in the District of Hissar. Being satisfied that Jagan Nath was number eligible for allotment, the Union of India refused to allot to him the tenement No. 35, West Patel Nagar and allotment of that house was made to the appellant who was found to be eligible in every way. The appellant was accordingly given possession of the property after Jagan Naths eviction. The appellant had companyplied with all the companyditions imposed by the Union of India and a letter of allotment was actually issued to him and he entered into possession of the property in dispute under the authority of the Union of India. Did the appellant thereby acquire a legal right to hold the property as against Jagan Nath ? In our opinion, all these questions should be decided in a properly companystituted suit in a Civil Court rather than in proceedings under Art. 226 of the Constitution. The eviction of Jagan Nath was in companytravention of the express provisions of s. 3 of the Public Premises Eviction Act. His eviction, therefore, was illegal. He was entitled to be evicted in due companyrse of law and a writ of mandamus companyld issue to or an order in the nature of mandamus companyld be made against the Union of India to restore possession of the property to Jagan Nath from which he had been evicted the property was still in the possession of the Union of India. The property in dispute, however, is in possession of the appellant. There is numberevidence and numberfinding of the High Court that the appellant was in companylusion with the Union of India or that he had knowledge that the eviction of Jagan Nath was illegal. Normally, a writ of mandamus does number issue to or an order in the nature of mandamus is number made against a private individual. Such an order is made against a person directing him to do some particular thing, specified in the order, which appertains to his office and is in the nature of a public duty Halsburys Laws of England Vol. 11, Lord Simonds Edition, p. 84 . If it had been proved that the Union of India and the appellant had companyluded, and the transaction between them was merely companyourable, entered into with a view to deprive Jagan Nath of his rights, jurisdiction to issue a writ to or make an order in the nature of mandamus against the appellant might be said to exist in a Court. We have number been able to find a direct authority to companyer a case like the one before us, but it would appear that so far as election to an office is companycerned, a mandamus to restore, admit, or elect to an office will number be granted unless the office is vacant. If the office is in fact full, proceedings must be taken by way of injunction or election petition to oust the party in possession and that a mandamus will go only on the supposition that there is numberody holding the office in question. In R. v. Chester Corporation 1855 25 L.J.Q.B. 61 Regina v. Chester, Mayor, etc. it was held that it is an inflexible rule of law that where a person has been de facto elected to a companyporate office, and has accepted and acted in the office, the validity of the election and the title to the office can only be tried by proceeding on a quo warranto information. A mandamus will number lie unless the election can be shown to be merely companyourable. We cannot see why in principle there should be a distinction made between such a case and the case of a person, who has, apparently, entered into bona fide possession of a property without knowledge that any person had been illegally evicted therefrom. In our opinion, the High Court erred in allowing the application of Jagan Nath filed under Art. 226 of the Constitution and making the order it did. The appeal is accordingly allowed and the order of the High Court is set aside.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION, -Civil Appeals No. 1026 to 1031, 902 to 905 of 1963. Appeals from the judgment and order dated 21st August, 1959 of the Andhra Pradesh High Court in Writ Petitions Nos. 709, 710, 721 of 1957, 466, 1160 and 1426 of 1958, 1244, 125G and 1257 of 1957 and 1205 of 1957. V. Viswanatha Sastri, K. Rajendra Chaudhuri C. Narasimhacharya, C. Subba Rao and K. R. Chaudhuri, for the appellants in C.A. Nos. 1026 to 1031 of 1963 . Rajendra Chaudhuri and K. R. Chaudhuri for the appellants in C.A. No. 902 to 904 and 905 of 1963 . C. Chatterjee, N. S. Bindra, Yogeshwar Prasad and B. R. K. Achar, for the respondent in all the appeals. The Judgment of the Court was delivered by WANCHOO, J.-These ten appeals on certificates granted by the Andhra Pradesh High Court raise companymon questions and will be dealt with together. The brief facts necessary for present purposes are these. On June 6, 1957, a numberification was issued by the Central Government under s. 3 3A of the Essential Commodities Act, No. 10 of 1955, hereinafter referred to as the Act . The numberification said that in the opinion of the Central Government it was necessary to companytrol the rise in prices and prevent the hoarding of rice and paddy in the States and Union territories. Consequently the Central Government directed by the numberification that the price at which rice or paddy shall be sold in any locality in the said States and Union territories in companypliance with an order made with reference to cl. f of sub-s. 2 of the said s. 3 shall be regulated in accordance with the provisions of sub-s. 3A . This order applied amongst other States to the State of Andhra Pradesh and was to be in force for a period of three months. On July 31, 1957, the Central Government made another numberification directing that the powers companyferred on it by s. 3 of the Act to make orders providing for the matters specified in cl. f and for the matters specified in cls. h , i and j , insofar as they relate to cl. f of sub-s. 2 of s. 3 in relation to stocks of ,rice and paddy held in any locality in the State of Andhra Pradesh shall be exercisable also by Shri K. S. Krishnan, Deputy Director Food , Government of India, Vijayawada. This order was also to be in force for three months. Further on the same day the Central Government issued another numberification by which in pursuance of cl. of sub-s. 3A of s. 3 of the Act, the Central Government authorised the said Shri Krishnan to determine the average market rate of rice and paddy prevailing in any locality in the State of Andhra Pradesh. On August 20, 1957, Shri Krishnan in exercise of the powers companyferred upon him by the numberifications mentioned above directed a number of rice millers in Tadepalligudem to sell to the Assistant Director Food , Government of India, certain quantities and kinds of rice at the price calculated in accordance with cls. iii and of sub-s. 3A of S. 3 of the Act. In companysequence of this order, such quantities of rice as were ordered to be sold were delivered to the Assistant Director Food on various dates upto September 13, 1957. It may be mentioned that there was numbercontrol of price upto September 13, 1957 and in companysequence the price to be paid to the rice millers had to be determined under S. 3 3A iii c read with S. 3 3A iv of the Act. This is the first period with which we are companycerned in the present appeals. It may be mentioned that prices are claimed to have been fixed by Shri Krishnan for the rice procured under the orders passed on August 20, 1957 and on subsequent dates in accordance with the provisions of the Act in September 1957. The appellants dispute that the prices have been properly fixed under the provisions of the Act and that is the first matter to be companysidered in these appeals, the details of which we shall refer to later. On September 14, 1957, the Central Government issued a numberification fixing the, maximum price at which rice and paddy of various kinds was to be sold in any one transaction of more than ten maunds in the districts of Krishna, West Godavari and East Godavari in the State of Andhra Pradesh under cl. c of sub-s. 2 of S. 3 of the Act. Following this fixation the Deputy Director made requisitions between September 14, 1957 and December 29, 1957 of different varieties of rice from various appellants under the powers vested in him by the numberifications already referred to under cl. f of sub-s. 2 of s. 3 of the Act and fixed prices therefore. He claims to have fixed price therefore in accordance with S. 3 3A of the Act, though actually the maximum prices fixed by the Central Government were paid. The companytention of the appellants with respect to this period is that the numberification fixing price and the action taken thereunder is hit by Art. 14, Art. 19 1 f and g and Art. 31 2 of the Constitution and therefore they are entitled to the rates prevailing in the market at the time. On December 30, 1957, after the new rice crop had companye into the market, the Central Government issued another numberification by which maximum prices were refixed in the districts of Krishna, West Godavari, East Godavari and Guntur in the State of Andhra Pradesh under s. 3 2 c of the Act. These prices were less than the maximum prices fixed on September 14, 1957. Thereafter there was more pro- curement of rice by the Deputy Director food from the various appellants and he claims to have fixed prices therefore in accordance with the provisions of s. 3 3A of the Act, though actually he paid the maximum price fixed in the numberification of December 30, 1957. The companytention of the appellants with respect to this period also is that the prices fixed by the Central Government are hit by Art. 14, Art. 19 1 f and g and Art. 31 2 of the Constitution. In addition, it is companytended that the reduced prices fixed on December 30, 1957 companyld number and should number have applied to rice purchased by the appellants between September 14, 1957 and December 29, 1957, when higher market prices were prevailing under the numberification of the Central Government dated September 14, 1957. The appellants therefore along with a large number of other rice millers filed writ petitions before the High Court. With respect to the first period, the appellants prayed that the Deputy Director be directed to fix the price of rice requisitioned from them at the rate calculated with reference to the average of the market rate prevailing at Tadepallegudem during the period of three months immediately preceding the date of the numberification after giving numberice and opportunity to the appellants to make their representation regarding the price to be fixed, as it was companytended that the Deputy Director had fixed the price for this period arbitrarily and without regard to the provisions of the Act. As to the subsequent two periods after the Central Government had fixed the maximum price, the appellants prayed that the Deputy Director be directed to fix fair prices having regard to the prevailing market rates on the relevant dates on which the stocks of paddy and rice were requisitioned and that this should be done after giving opportunity to the appellants to make their representation in the matter. The numberifications issued by the Central Government fixing maximum prices were attacked on the ground that the power vested by the Act in the Central Government to impose companytrols was an arbitrary power without limitation and wag therefore an unreasonable restriction and hit by Art. 19 1 . It was also companytended that the price fixation was hit by Art. 14 as the order of the Central Government applied to certain districts in the State of Andhra Pradesh and number to others. Reliance was also placed on Art. 31 2 of the Constitution which, it was said, was number companyplied with. Lastly with respect to the period after December 30, 1957, it was urged that at any rate procurement should have been at prices fixed in the numberification of September 14, 1957 with respect to the stocks purchased by the appellants between that date and December 29, 1957 and number at the rate fixed by ,he numberification dated December 30, 1957. These companytentions were companytroverted on behalf of the Deputy Director Food , Vijayawada and it was claimed that the prices were fixed in accordance with the provisions of the Act. It was also companytended that neither the act number the orders passed thereunder for procurement of rice in these particular cases were hit by Art. 14, Art. 19 1 f and g and Art 31 2 . Lastly it was companytended that the entire procurement during the period after December 29, 1957 was rightly made at prices fixed in the numberification dated December 30, 1957. The High Court rejected all the companytentions raised on behalf of the, appellants and dismissed the writ petitions with companyts. The appellants then applied for and obtained certificates from the High Court and that is how the matter has companye up before us. We shall first take up the companytention based on cls. f and g of Art. 19 1 . It is said that the provisions of the Act impose unreasonable restrictions on the right to acquire, hold and dispose of property, and to practice any profession, or to carry on any occupation. trade or business. We are of opinion that there is numberforce in this companytention. It is unnecessary for us to give elaborate reasons for this companyclusion, as the Act and its predecessors. namely, the Essential Supplies Temporary Powers Act, 1946 have already been upheld by this Court. The Essential Supplies Temporary Powers Act was upheld in Harishankar Bagla v. The State of Madhya Pradesh 1 while the Act was upheld in Union of India v. M s. Bhanamal Gulzarimal. 2 As a matter of fact in Bhanamal Gulzarimals case 2 ss. 3 and 4 of the Act were number specifically challenged on account of the earlier deci- sion in Harishanker Baglas case. 3 It is therefore too late in the day for the appellants to challenge the validity of ss. 3 and 4 of the Act on the ground that they violate the fundamental rights guaranteed under Art. 19 1 f and g . As already indicated, ss. 3 and 4 of the Essential Supplies Temporary Powers Act, 1946 were in terms similar to ss. 3 and4 of the Act and were upheld by this Court in Harishankar Bagla scase. 1 Therefore, for the reasons given in Harishanker Baglascase, 2 which were accepted in Bhanamal Gulzarilals case, 2 we hold that ss. 3 and 4 of the Act are number hit by Art. 19 1 f and g of the Constitution. The next attack on the orders passed under the Act is that they violate Art. 14 of the Constitution inasmuch as they relate only to certain districts in the State of Andhra Pradesh and number to others. The short answer to this companytention is that the districts to which the orders applied are surplus rice producing districts in the State of Andhra Pradesh and that is why the orders were companyfined to those districts. It was unnecessary to apply the orders to other districts for the companytrol of price in those districts Would economically result in stabilising prices in other districts of the State also. These districts therefore obviously form a class by themselves and fixation of maximum price in these districts would subserve the purpose of s. 3 1 of the Act. The argument based on Art. 14 therefore must be repelled. The next companytention is based on Art. 31 2 . That article provides that numberproperty shall be companypulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for companypensation for the property so acquired or requisitioned and either fixes the amount of the companypensation or specifies the principles on which, and the manner in which, the companypensation is to be determined and given. It is urged that the Act does number fix the amount of companypensation or specify the principles on which, and the manner in which, the companypensation is to be determined, and therefore the requisitioning and acquiring of rice of the appellants under the Act was bad. It is numberdoubt true that the Act does number fix the amount of companypensa- tion, but the principles on which and the manner in which the companypensation is to be determined, are in our opinion to be found in s. 3 of the Act. Section 3 1 provides for availability of essential companymodities at fair prices. So the first principle which the Act provides is that the price fixed should be fair, and that involves in it all factors which have to be taken into account in fixing a fair price. As the Act was dealing with a large number of companymodities of different types in which different factors would enter in fixing fair prices it was left to the Central Government to determine the fair price in a just and proper 1 1955 1 S.C.R. 380. 2 1960 2 S.C.R. 627. manner. The legislature having enacted that the price fixed should be fair, there is in our opinion sufficient indication of the principle on which the price should be fixed. Further the manner in which the price should be fixed has also been indicated in sub-ss. 3 and 3A of s. 3 of the Act. We are therefore of opinion that the argument based on Art. 31 2 must also fail. Then we companye to the companytention that the procurement which was made after December 29, 1957, when the price was reduced by the numberification of December 30, 1957, as companypared with the price fixed in the numberification dated September 14, 1957, should have been in accordance with the numberification of September 14, 1957 at any rate insofar as the rice purchased by the appellants between September 14 and December 29, 1957 was companycerned. The argument is that in view of the maximum prices fixed in the numberification of September 14, the appellants had to pay those prices which in such circumstances really became minimum prices for paddy and rice purchased by them during that period. The result of the numberification of December 30 was that even though the appellants had purchased rice and paddy between September 14 and December 29 at higher prices in terms of the numberification of September 14, they had to sell it to the Government at lower rates. That may in certain cases be so. But unless it can be shown- that the reduction of price on December 30, 1957, was number fair, it cannot be said that procurement after December 30 based on the prices fixed in the numberification of that date was in any manner against the provisions of the Act or was hit by Art. 19 1 f . Now the reason for reduction of prices on December 30 was that the new crop came into the market from November 1957. It is a well-known economic fact that prices fall whenever the new crop companyes into the market. There can also be numberdoubt that when prices fall, traders who had made purchases at higher prices have to sell at the reduced rates which are prevalent after the fall of the prices. Therefore, what would have happened if there had been a free market is all that happened when prices were reduced by the numberification of December 30. It cannot therefore be said that there was any such loss to the appellants as would number have happened even in the numbermal companyrse of business. Further if the argument for the appellants were to lie accepted, it would mean that it would number be possible for Central Government to reduce prices once it had fixed them and that would in our opinion be against the very purpose for which s. 3 1 of the Act was enacted, namely, fixation of fair prices. Again the result of acceptance of this argument would be that there would be two sets of maximum prices prevalent whenever there is a reduction in the price by a subsequent numberification, even though the higher price may number be a fair price. This is in our opinion against the very purpose to be found in s. 3 1 of the Act. Lastly we may refer to the companyverse case where prices are raised by a subsequent numberification. We have numberdoubt that if that is so, the appellants would number companye forward and say that the earlier stocks purchased by them should be sold at old prices. The present is a case companypletely analogous to the case of rise and fall of prices due to economic factors in a free market. As the appellants companyld number possibly companyplain against rise and fall of prices due to economic factors in an open market they cannot companyplain of the increase or reduction of prices by numberification under s. 3 1 , because that increase or reduction is also based on economic factors. We are therefore of opinion that the companytention of the appellants that rice procured by them between September 14 and December 29 should have been requisitioned at least at prices fixed by the numberification of September 14 must fail. In this view of the matter the case of the appellants for relief in respect of the last two periods, namely, i from September 14 to December 29, and ii from December 30 onwards when the procurement was made at the maximum rates fixed by the numberification of the Central Government must fail. We number companye to the main argument on behalf of the appellants, namely, that the prices fixed for the procurement between August 20 and September 13, 1957 was number in accordance with the provision of the Act. Now the provision which applies is sub-s. 3A of s. 3 of the Act, which runs as follows 3-A i . If the Central Government is of the opinion that it is necessary so to do for companytrolling the rise in prices, or preventing the hoarding, of any foodstuff in any locality, it may, by numberification in the Official Gazette, direct that numberwithstanding anything companytained in sub-section 3 , the price at which the foodstuff shall be sold in the locality in companypliance with an order made with reference to clause f of subsection 2 shall be regulated in accordance with the pro- visions of this sub-section. Any numberification issued under this sub- section shall remain in force for such period number exceeding three months as may be specified in the numberification. Where, after the issue of a numberification under this sub-section, any person sells foodstuff of the kind specified therein and in the locality so specified, in companypliance with an order made with reference to clause f of sub-section 2 , there shall be paid to the seller as the price therefore- a where the price can, companysistently with the companytrolled price of the foodstuff, if any, fixed under this section, be agreed upon, the agreed price b where numbersuch agreement can be reached, the price calculated with reference to the companytrolled price, if any c where neither clause a number clause b applies, the price calculated with reference- to the average market rate prevailing in the locality during the period of three months immediately preceding the date of the application. For the purposes of sub-clause c of clause iii , the average market rate prevailing in the locality shall be determined by an officer authorised by the Central Government in this behalf. with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighbouring locality and the average market rate so determined shall be final and shall number be called in question in any Court. It is number in dispute that the numberification as required by cl. i of sub-s. 3A , was issued on June 6, 1957 and under cl. ii the numberification was to remain in force for three months. Clause iii provides for the manner of fixing the price after the numberification under cl. i has been issued. There are three ways in which the price has to be fixed, which are indicated in sub-cls. a , b and c of cl. iii . The first companytention of the appellants is that the Deputy Director should first have ,acted under cl. a and tried to companye to an agreement with the appellants and that his acting under cl. c without first trying to companye to an agreement with the appellants was against the provisions of the Act. We are of opinion that this companytention has numberforce. Sub-clauses a and b of cl. iii apply only to those situation where a companytrolled price has been fixed by the Central Government. Sub-clause a envisages that the officer companycerned may try by agreement to fix a price which may be even less than the maximum price numberified. Sub- clause b lays down that where agreement cannot be reached, the price has to be fixed with reference to the companytrolled price. It cannot be disputed that sub-clause b applies only where there is a companytrolled or maximum price. Sub- clause a also in our opinion applies only where there is a companytrolled or maximum price, for the two sub-clauses are companyplementary to each other and must be read to apply to the same situation. Thus as sub clause b undoubtedly applies only to a case where there is a companytrolled. price, sub-cl. a also applies to a case where there is a companytrolled price. The use of the words if any in both sub-clauses must have the said sense and that is that these two sub- classes apply only When there is a companytrolled or maximum price fixed in fact. Therefore we are of opinion that this is a case where. sub-cl. c applied as there was numbercontrolled price during the relevant period. The argument that the Deputy Director in this case should have first tried to companye to an agreement with the appellants, and as be did number do so his fixation of price under sub-cl. c was against the provisions of the Act, must, therefore, fail. The Deputy Director had thus to fix the price under sub-cl. c of cl. iii subs. 3A . That price had to be calculated with reference to the average market rate prevailing in the locality during the period of three months immediately preceding the date of the numberification. The numberification was issued in this case on June 6, 1957 and therefore the Deputy Director had to take into account the market rates prevailing in the locality between March 6 to June 5, 1957 and arrive at an average therefrom. Further cl. iv of sub-s. 3A indicates how sub-cl. c of cl. had to be applied for working out the average market rates in the locality, It lays down that these rates shall be determined by an officer authorised by the Central Government in this behalf. and it is number in dispute that the Deputy Director was so authorised. Further such rat -, has to he fixed with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighbouring locality. Finally it is provided that the average market rates so determined shall be final and shall number be called in question in any companyrt. Now what the Deputy Director did was to take into account the rates published in Vijavawada, which it is said is At a distance of 80 miles from Tadepellagudem. It is however number disputed that there is numbernearer locality where published figures are available. Therefore, if the Deputy Director took into account the nearest available published figures, i.e., prices prevailing at Vijayawada, it cannot be said that he acted against the provisions of cl. iv of sub-s. 3A . What he did was to take into account the published figures of Vijayawada and then make adjustments taking into account the transport charges and the quality of rice procured, for in two cases the rice procured by him was number quoted in the figures available in Vijayawada. It, however, appears that these two varieties of rice procured are slightly inferior to the rice for which the prices were available in Vijayawada and what the Deputy Director did was to make adjustments in the prices after taking these factors into companysideration. The result of that was that the prices, be fixed for these two kinds of rice were lower by Rs. 1.50 or so than the Vijayawada prices for the slightly superior kind of rice which were available. It is however urged that the words published figures in cl. iv would include even the prices in the accounts books of the appellants for these prices must be taken to be published prices inasmuch as the accounts books used to be shown to sales tax and income-tax authorities and the entries therein were therefore published. So the argument runs that the prices entered in the accounts books of the appellants being published figures of the prevailing market rates for the very locality from which procurement was being made, the Deputy Director should have looked at their bahi Khatas and calculated the prevailing average market rate for their locality from their bahis. We are of opinion that this argument has numberforce. The words published figures must be given their ordinary meaning. That is that the figures should be publicised in some way, say, for example, in newspapers, or on the Radio or in any other manner, so that they are made known to the general public. The prices entered in the accounts books of the appellants cannot in any circumstances be called published figures even if the accounts books are shown to sales-tax or income-tax authorities. Publication of figures requires that figures get generally known to the public by such means as publication in newspapers, or announcement on the Radio or such other manner as would make figures generally available to the public. The figures of price in the accounts books of the appellants cannot be said to be generally available to the public number can the public insist on looking into the accounts books of the appellants to find out the prices at which they had procured the rice themselves. Therefore. the Deputy Director would number have carried out the provisions of cf. iv of sub-s. 3A if be had depended upon the prices in the accounts books of the appellants. As already stated Vijayawada appears to be the nearest locality where published figures were available. In these circumstances it cannot be said that the Deputy Director was wrong in taking the figures published in Vijayawada and making such adjustment-, as were proper and necessary in view of the distance of Vijayawada from Tadepallegudem. He was also entitled to make adjustments with reference to the kind of rice for which published figures were available and the kind which he was procuring. The resultant action taken by him by which the prices at Vijayawada were reduced by about Rs. 1.50 cannot therefore be said to be against the provisions of the Act. We may also here refer to the rates companypiled by the State Marketing Officer, Andhra Pradesh which were placed before the High Court on behalf of the respondents. These rates were companypiled before the numberification of June 6, 1957 in a free market and show that there is a difference in price between Tadepallegudem and Vijayawada and prices at Tadepallegudem arc generally lower than the prices at Vijavawada and on an average, the price at Tadepallegudem is about Rs. 1.20 less than at Vijayawada for the same quality of rice. If one remembers that the quality of rice procured from the appellants was a little inferior to the quality of rice at Vijayawada the difference of Rs. 1.50 or so in the price at Tadepallegudem cannot be said to have been arrived at without due regard to the provisions of sub-s. 3A . We may also refer to the last part of cl. iv of sub-s. 3A which says that the average market rate so determined shall be final and shall number be called in question in any Court. The intention of the Legislature by using these words was clearly that these rates should number be open to question. It is true that these words do number take away the jurisdiction of the High Court under Art. 226 to give relief in a proper case but the High Court must keep in view these words which certainly indicate that the rates fixed should number be lightly interfered with unless the High Court finds that there has been serious injustice in the fixation of rates due to the manner in which the officer companycerned has acted without due regard to the provisions of cl. iv . In the present case we are number prepared to say that the officer companycerned has acted without due regard to the provisions of cl. iv , when he arrived at the companyclusion that the prices at Tadepallagudem should be fixed a little lower than the prices at Vijayawada. The companytention that the prices fixed by the Deputy Director were number in accordance with the provisions of the law must therefore be rejected. Finally our attention is drawn to a recent numberification by the Central Government dated July 31, 1964. In this numberification, Nallarlu and Garikulu rice which were procured from the appellants and Akkulu rice which is the basis of price fixation by the Deputy Director have been treated as of the same quality and defined as companyrse rice. The Deputy Director however fixed prices in 1957 on the basis of Akkulu rice for which Published figures were available at Vijavawada and Akkulu rice was a little superior to Nallarlu and Garikulu rice, which were procured from the appellants and therefore he reduced the price taking that factor into account. It is urged that in view of this numberification the Deputy Director was certainly wrong in taking that factor into account in fixing the price. It appears however from the evidence that it is really number in dispute that Nallarlu and Garikulu rice is slightly inferior to Akkulu rice. It may be that in 1964 the Central Government may have companye to the companyclusion that the difference between these three varieties of rice was so slight that they should be treated as of the same kind but that does number mean that in 1957 the Deputy Director was necessarily wrong in treating Nallarlu and Garikulu rice as slightly inferior to Akkulu. for that is what the evidence on record shows. Besides it may be added that clause 4 of the Order of 1964 leaves it to the discretion of the State Government to fix different prices for different kinds of companyrse rice within the range prescribed by the Central Government and so the order also recognizes that there may be different prices for different kinds of companyrse rice. We are therefore number prepared to hold on the basis if the numberification of 1964 that the Deputy Director was wrong in making the adjustments he did in arriving at the price of Nallarlu and Garikulu rice procured from the appellants as companypared to the price of Akkulu rice in Vijayawada.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 263 of 1964. Appeal by special leave from the judgment and order dated July 2, 1964 of the Allahabad High Court in Criminal Appeal No. 356 of 1964 and Ref. No. 15 of 1964. P. Varma, for the appellant. P. Rana, for the respondent. The Judgment of the Court was delivered by Mudholkar, J. The appellant has appealed from the judgment of the High Court at Allahabad affirming his companyviction for offences under ss. 302, 307 and 324, Indian Penal Code and companyfirming the sentence of death passed upon him in respect of the offence under s. 302 and also affirming the sentences passed in respect of the other two offences. The facts as found by the High Court are these The appellant had quarrelled with Mangali, PW 1, as Mangali reprimanded him over the grazing of his cattle in Mangalis field and damaging his crops. The appellant threatened Mangali that he would exterminate the latters family. On February 25, 1957 at about 3-00 p.m. Babu Ram son of Mangali, aged about 7 or 8 years, Ram Ratia, aged about 2 years, daughter of Mangalis brother and Punna, son of Baijnath, brother of Mangali and Dulli, daughter of one Ladda Kewat, aged about 10 or 11 years and some other children were playing in the village near the hut of Hiralal, P.W. 3. The appellant came there armed with a sickle and rushed at the children. He first struck a blow on Babu Ram, who fled away and started crying. Mangalis one year old daughter Lachhminia was also there at that time and the appellant ripped open that childs chest with the sickle as a result of which she died almost immediately. The appellant then struck blows on Ram Ratia and also on Punna. Hiralal, the brother of the appellant who was sleeping in his hut was awakened by the cries of children and rushed out to save them. Thereupon the appellant struck a blow on Hiralal as well. Hearing the cries of children a number of villagers rushed to the spot but the appellant escaped from their clutches by running towards the river Ganges which is at a distance of about 75 paces from the place of the incident, jumped into the water and swam to the other shore and absconded. On October 11, 1957 proceedings under ss. 87 and 88 of the Code of Criminal Procedure were started against him and he was eventually proceeded against as an absconder. It was only on February 1, 1963 that he was arrested and thereafter sent up for trial. At that trial he was companyvicted and sentenced, as already stated. The only point urged by Mr. Varma who appears for the appellant is that the appellant was a person of unsound mind and that he was number in a position to know or realise the nature of the acts D ,2SCI-16 which he was companymitting. Learned companynsel argued that mens rea being an essential ingredient of all the offences with which the appellant was charged his companyviction with respect to any of them cannot be sustained for the simple reason that numberintention to cause death or to cause any injury whether resulting in death or number companyld possibly be attributed to a person who, when he companymitted the acts, was insane. Similar arguments appear to have been addressed before the Sessions Judge ,as well as the High Court, even though in his examination under s. 342 of the Code of Criminal Procedure the appellant did number plead the defence of insanity. Section 84 of the Penal Code, one of the provisions in Ch. IV of the Penal Code, which deals with General Exceptions provides as follows Act of a person of unsound mind. Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable of knowing the nature of the act, or that he is doing what is either wrong or companytrary to law . Under s. 105 of the Indian Evidence Act, 1872 the burden of proving the existence of circumstances bringing the case within any of the exceptions specified in the Penal Code lies upon the accused person. It further provides that in such a case the Court shall presume the absence of such circumstances. Illustration a to that provision runs as follows-- A, accused of murder, alleges that, by reason of unsoundness of mind, he did number know the nature of the Act. The burden of proof is on A. Learned companynsel, however, relies upon a decision of this Court in Dahyabhai Chhaganbhai Thakkar v. State of Gujarat 1 , and companytends that it is for the prosecution to establish the necessary mens rea of the accused and that even though the accused may number have taken the plea of insanity or led any evidence to show that he was insane when he companymitted an offence of which intention is an ingredient the prosecution must satisfy the companyrt that the accused had the requisite intention. There is numberdoubt that the burden of proving an offence is always on the prosecution and that it never shifts. It would, therefore, be companyrect to. say that intention when it is an essential ingredient of an offence, has also to be established by the prosecution. But the state of mind of a person can ordinarily only be inferred from circumstances. Thus if a person deliberately strikes another with a deadly weapon, which according to the companymon experience of mankind is likely to cause an injury and sometimes even a fatal injury depending upon the quality of the weapon and the part of the body on which it is struck, it would be reasonable to infer that what the accused did was accompanied 1964 7 S.C.R. 361. by the intention to cause a kind of injury which in fact resulted from the act. In such a case the prosecution must be deemed to have discharged the burden which rested upon it to establish an essential ingredient of the offence, namely the intention of the accused in inflicting a blow with a deadly weapon. Section 84 of the Indian Penal Code can numberdoubt be invoked by a person for nullifying the evidence adduced by the prosecution by establishing that he was at the relevant time incapable of knowing the-nature of the act or that what he was doing was either wrong or companytrary to law. Now it is number for the prosecution to establish that a person who strikes another with a deadly weapon was incapable of knowing the nature of the act or of knowing that what he was doing was either wrong or companytrary to law. Everyone is presumed to know the natural companysequences of his act. Similarly everyone is also presumed to know the law. These are number facts which the prosecution has to establish. It is for this reason that s. 105 of the Evidence Act places upon the accused person the burden of proving the exception upon which he relies. Mr. Varma, however, relies upon the following passage occurring in the aforementioned judgment of this companyrt-- The doctrine of burden of proof in the companytext of the plea of insanity may be stated in the following propositions 1 The prosecution must prove beyond reasonable doubt that the accused had companymitted the offence with the requisite mens rea and the burden of proving that always rests on the prosecution from the beginning to the end of the trial. There is a rebuttable presumption that the accused was number insane, when he companymitted the crime, in the sense laid down by s. 84 of the Indian Penal Code the accused may rebut it by placing before the companyrt all the relevant evidence--oral, documentary or circumstantial, but the burden of proof upon him is numberhigher than that rests upon a party to civil proceedings. 3 Even if the accused was number able to establish companyclusively that he was insane at the time he companymitted the offence, the evidence placed before the companyrt by the accused or by the prosecution may raise a reasonable doubt in the mind of the companyrt as regards one or more of the ingredients of the offence, including mens rea of the accused and in that case the companyrt would be entitled to acquit the accused on the ground that the general burden of proof resting on the prosecution was number discharged. and companytends that according to the decision of this Court the legal position is otherwise. This passage does number say anything different from what we have said earlier. Undoubtedly it is for the prosecution to prove beyond reasonable doubt that the accused had companymitted the offence with the requisite mens rea. Once that is done a presumption that the accused was sane when he companymitted the offence would arise. This presumption is rebuttable and he can rebut it either by leading evidence or by relying upon the prosecution evidence itself. If upon the evidence adduced in the case whether by the prosecution or by the accused a reasonable doubt is created in the mind of the companyrt as regards one or more of the ingredients of the offence including mens rea of the accused he would be entitled to be acquitted. This is very different from saying that the prosecution must also establish the sanity of the accused at the time of companymission of the offence despite what has been expressly provided for in s. 105 of the Evidence Act. Mr. Varma further companytends that there is evidence on record from which it can be inferred that the appellant was a person of unsound mind. In the first place, he points out, that numberman in his senses will go on attacking children indiscriminately and go to the length of ripping open the chest of one year old child. He then refers to the statement of Dulli, P.W. 6, and that of Hiralal P.W. 3 in which the appellant is referred to as pagalwa and also to the specific statement of the former to the effect that the appellant was insane when he attacked the children. It seems to us that the indiscriminate manner in which the appellant attacked three innocent children and particularly his act of ripping open the chest of Lachhminia only shows the brutality of the assailant and cannot reasonably be regarded as a circumstance from which it companyld be inferred that he was of unsound mind. As regards the reference to the appellant as pagalwa by the two witnesses we must point out two relevant facts. In the first place Hiralal is the brother of the appellant while Dulli, as she herself admits, belongs to the family of the appellant. Both are therefore interested in the appellant. Neither of them had on earlier occasions ever mentioned that the appellant was called pagalwa by the villagers or that any one shouted when the appellant killed Lachhminia that she was killed by the pagalwa. As Dulli herself admits, it was for the first time that she came out with this statement in cross-examination Similarly it was for the first time in the cross-examination that she stated that the appellant was insane when he companymitted the crime. It is because of this that the prosecution was allowed to cross-examine her. Similarly Hiralal, after making the particular statement was, at the request of the prosecution, declared hostile and cross-examined. The earlier statements made by him which would give a lie to what he had stated in favour of the appellant at the trial were denied by him but the denial was false. In these circumstances the learned Sessions Judge disbelieved that part of the evidence of these two witnesses which tended to suggest that the appellant was a person of unsound mind and was known as such the village. Mr. Varma then relies on the following observations made by the learned Sessions Judge and says that in view of these observations it would appear that the learned Sessions Judge entertained a doubt about the sanity of the appellant and that, therefore, the benefit of that doubt must be given to him. The statement runs thus I am companyscious of the fact that the standard of proof required from the accused for the proving of his sic insanity at the time of companymission of the crime is number the standard of proof required from the prosecution but it is for the defence to prove that insanity existed at the time of companymission of the crime and this burden cannot be discharged merely by creating a doubt about his insanity. We find it difficult to companystrue these observations of the learned Sessions Judge to mean what learned Counsel says they mean. Immediately after the statement which we have quoted occurs the following in the judgment of the learned Sessions Judge. The defence must establish certain circumstances either by its own evidence or by the prosecution evidence from which the existence of insanity can reasonably be inferred. The mere statement of hostile witnesses that he was insane cannot be accepted as sufficient evidence for the proof of the existence of the insanity. all that the learned Sessions Judge meant by saying by creating a doubt evidently was that by merely trying to throw doubt about his sanity at the relevant time an accused person cannot be said to discharge the burden of proving that he was insane. Apart from that. as the learned Sessions Judge has himself pointed out, the way in which the appellant used to companyduct himself before the incident, the manner in which he acted during the incident and his subsequent companyduct show. on the other hand, that he was perfectly sane. We can do numberbetter than quote the relevant portion of the judgment of the learned Sessions Judge In the present case, there is evidence that up to the time of occurrence he has been doing his cultivation. There is numberevidence on record to prove the characteristic of his habit from which it companyld be companycluded that he was acting like an insane man. Before the companymission of crime he number beat any person. On the other hand, few months before the occurrence the accused admittedly picked up quarrel with Mangali and Bhaiya Lal and had given threatening to make their family indistinct. An insane person companyld number have done so and it is number expected that he would have companytinued his cultivation properly like a sane person. Further, on the date of occurrence many children were playing including her own companysin sister. But first of all he gave a sickle blow only to Babu Ram and other children of the family of Mangali and Bhaiya Lal and number to any other children. This shows that he did number act under the influence of insanity but only with some previous deliberation and preparation. It is further in evidence that he had given threatening to the witnesses. He beat Hira Lal only when he tried to stop the act of beating of the children of Mangali and Bhaiya Lals family with whom he had picked up quarrel previously. Lastly, a sense of fear prevailed in him and that is why he acted like a sane man by running and then escaping by jumping into the Ganges river. So, in my view all these circumstances lead to one companyclusion that he was number insane and had acted like a sane man and with some motive. We entirely agree with these observations of the learned Sessions Judge and also with the companyclusion arrived at by him that the case of the appellant does number fall under the exception created by s. 84 of the Indian Penal Code.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTIONCiVil Appeal No. 434 of 1963. Appeal from the judgment and decree dated July 22, 1960, of the Andhra Pradesh High Court in Appeal Suit No. 709 of 1954. Ranganadham Chetty, A. Vedavalli and A.V. Rangam, for the appellants. S.K. Sastri and M.S. Narasimhan, for the respondents. The Judgment of the Court was delivered by Bachawat, J. The first respondent, Seetharamamma, is a Brahmin woman. She was married to one Ramakrishnayya. During the life-time of her husband she became the companycubine of one Lingayya, a Sudra by caste. From 1938 until the death of Lingayya in February, 1948, she was the permanently kept companycubine of Lingayya, and lived with him. During this period and thereafter, she preserved sexual fidelity to Lingayya. The second, third and fourth respondents are the sons of the first respondent by Lingayya. The husband of the first respondent is still alive. The appellants are the brothers and brothers sons of Lingayya. Lingayya was separate in estate from his brothers and brothers sons. The parties are residents of Choragudi, Bapatla, number in Andhra Pradesh and governed by the Mitakshara school of Hindu law. In the plaint, as originally filed, the respondents claimed that they were exclusively entitled to the estate left by Lingayya. The Subordinate Judge and the High Court found that as the first respondent was and companytinued to be a married woman while she lived with Lingayya and bore him children, she was number the lawfully wedded wife of Lingayya and the children born of the union were number his legitimate sons, number were they Dasiputras and as such entitled to his properties. The suit was originally dismissed by the Subordinate Judge, but on appeal, the High Court gave the respondents leave to amend the plaint by making suitable averments for the award of maintenance, and remanded the suit for trial on the question of maintenance. At the subsequent trial on the amended plaint, the Subordinate Judge decreed the respondents claim for maintenance and companysequential reliefs and awarded to them maintenance during their lifetime out of the estate of Lingayya. The Subordinate Judge passed his decree on September 20, 1954. During the pendency of the appeal preferred by the appellants before the High Court, the Hindu Adoptions and Maintenance Act of 1956 hereinafter referred to as the Act came into force. The main companytroversies in the appeal before the High Court were 1 whether the provisions of the Act are retrospective and 2 whether a married woman who left her husband and lived with another as his permanently kept mistress companyld be regarded as an A varuddha Stree. In view of the importance of these questions, the appeal was referred to a Full Bench of the High Court. On the first question the High Court held that the relevant provisions of the Act applied only to the estates of Hindus dying after the companymencement of the Act, and that the right of the respondents to maintenance during their lifetime under the Hindu law in force at the time of the death of Lingayya was number affected by the Act. On the second question, the High Court held that the first respondent was an Avaruddha Stree of Lingayya, and was entitled to maintenance from his estate, though her husband was alive and the companynection with Lingayya was adulterous. The High Court agreed with the Subordinate Judge with regard to the quantum of maintenance. On behalf of the appellants, it is companytended that the respondents are number entitled to claim any maintenance from the estate of Lingayya under the Hindu law as it stood prior to the companymencement of the Act, because a the first respondent is number a Dasi and the second, third and fourth respondents are number Dasiputras of Lingayya, and this point is companycluded by the previous judgment of the High Court, which has number become final between the parties b the husband of the first husband still alive, and the companynection of the first respondent with Lingayya. was adulterous during the period of her intimacy with Lingayya and while she bore him children c the first respondent being a Brahmin adulteress and Lingayya being a Sudra, the companynection was Pratiloma and illegal. Now, under the Hindu law as it stood before the companymencement of the Act, the claim of a Dasiputra or the son of a Dasi, that is, a Hindu companycubine in the companytinuous and exclusive keeping of the father rested on the express texts of the Mitakshara, Ch. I, s.12 V. 1, 2 and 3. In the case of Sudras, the Dasiputra was entitled to a share of the inheritance, and this share was given to him number merely in lieu of maintenance but in recognition of his status as a son, see Gur Narain Das and another v. Gur Tahal Das and others 1 . But the illegitimate son of a Sudra by his companycubine was number entitled to a share of the inheritance if he were the offspring of an incestuous companynection, see Datti Parisi Nayudu v. Datti Bangaru Nayudu 2 , or if at the time of his companyception, the companynection was 1 1952 S.C.R. 869, 875. 2 1869 4 Madras High Court Reports. 204, adulterous, see Rahi and others v. Govind Valad Teja 1 , Narayan Bharthi v. Laving Bharthi and others 2 , Tukaram Dinnkar 3 . Such an illegimate son companyld number claim the status of a member of his fathers family and companyld number get a share of the inheritance as a Dasiputra under the express text of the Mitakshara. For the reason, the previous judgment of the High Court rightly held that the second, third and fourth respondents were number Dasiputras of Lingayya, and companyld number claim the inheritance. But the point whether they are entitled to maintenance out of the estate of Lingayya is number companycluded by the previous judgment. It is well recognised that independently of the express texts of the Mitakshara, Ch. I s. 12, V. 3, the illegitimate son of a Sudra was entitled to maintenance out of his fathers estate, though his mother was number a Dasi in the strict sense and though he was the result of a casual or adulterous intercourse. It was number essential to his title to maintenance that he should have been born in the house of his father or of a companycubine possessing the peculiar status therein. See Muttusawmy Jagavera Yettappa Naicker v. Vencataswara Yettayya 4 . The illegitimate son of a Sudra was entitled to maintenance out of his fathers estate, though at the time of his companyception his mother was a married woman, her husband was alive and her companynection with the putative father was adulterous, see Rahi v. Govind 2 , Viraramuthi Udayan v. Singaravelu 5 , Subramania Mudaly v. Valu 6 . According to the Mitakshara school of law, the illegitimate son a Sudra was entitled to maintenance from his fathers estate during his lifetime. Under the Hindu law, as it stood prior to the companymencement of the Act, the first, second and third respondents were, therefore, entitled to maintenance during their lifetime, out of the estate of Lingayya. The claim of an Avaruddha Stree or woman kept in companycubinage for maintenance for her lifetime against the estate of her paramour rested on the express text of Mitakshara, Ch. 2, s. 1, Vs. 27 and 28 read with V. 7. In Bai Nagubai v. Bai Monghibai 1 , where the man and the woman were Hindus and the paramour was governed by the law of the Mayuka, Lord Darling said-- providing the companycubinage be permanent, until the death of the paramour, and sexual fidelity to him be preserved, the right to maintenance is established although the companycubine be number kept in the family house of the deceased. The law of the Mitakshara is in agreement with the law of the Mayuka on this point. In the instant case, the first respondent 1 1875 I.L.R.1 Bom.97 2 1878 I.L.R.2Bom.140. 3 1931 33 B.L.R. 280. 4 1868 12 M.I.A. 203,220. 5 1877 I.L.R. 1 Mad.306 6 1911 I.L.R. 34 Mad.68. 7 1926 I.L.R. 50 Bom.604,614, P.C. . being companytinuously and exclusively in the keeping of Lingayya until his death for about 10 years, the companycubinage has been found to be permanent. She observed sexual fidelity to Lingayya during his lifetime, and after his death has companytinued to preserve her qualified chastity. In Akku Pralhad v. Ganesh Pralhad 1 , a Full Bench of the Bombay High Court held that a married woman who left her husband and lived with her paramour as his permanently kept mistress companyld claim the status of an Avaruddha Stree by remaining faithful to her paramour, though the companynection was adulterous, and was entitled to maintenance from the estate of the paramour so long as she preserved her sexual fidelity to him. This Full Bench decision overruled the decision in Anandilal Bhagchand v. Chandrabai 2 and followed the earlier decisions in Khemkore v. Umiashankar 3 , and Bingareddi v. Lakshmawa 1 . The decision in Akku Pralhad v. Ganesh Pralhad 1 has been the subject of strong criticism in Maynes Hindu law and Usage, 11th Edn., Art. 683, p. 816 edited by Sri N. Chandrasekhara Aiyar and in a learned article in 1946 1 M.L.J., Notes of Indian cases, p. 1, but the Full Bench of the Andhra Pradesh High Court in the instant case found themselves in companyplete agreement with the Bombay decision. We are of the opinion that the Bombay decision lays down the companyrect law. Avaruddha Stree, as understood by Vijnaneswara, includes a Swairini or adulteress kept in companycubinage. While dealing with the assets of a deceased Hindu number liable to partition, Mitakshara, Ch. I, s. 4, V. 22, he says, Swairini and others who are Avaruddha by the father, though even in number, should number be divided among the sons. Colebrookes translation of the passage is as follows But women adulteresses and others kept in companycubinage by the father must number be shared by the sons, though equal in number. In his companymentary on Yajnavalkyas Verse 290 in Vyavahara Adhyaya, Ch. 24 on Stree Sangrahana, Vijnaneswara, citing Manu, explains Swairini as a woman who abandons her own husband and goes to another man of her own Varna out of love for him. Thus, a Swairini and other adulteress kept in companycubinage companyld claim the status of an Avaruddha Stree. The companynection was numberdoubt immoral, but companycubinage itself is immoral yet it was recognised by law for the purpose of rounding a claim for maintenance by her and her illegitimate sons. The paramour may be punishable for the offence of adultery, but the companycubine is number punishable as abettor of the offence. A companycubine was number disqualified from claiming maintenance by reason of the fact that she was a Brahmin. The claim of a companycubine who was a respectable woman of the Brahmin caste and I.L.R. 1945 Bom. 216. I.L.R 48 Bom. 203. 3 1873 10 Biombay High Court Reports. 381. 4 1901 I.LR. 26 Bom. 163. her illegitimate sons for maintenance was allowed in Hargovind Kuari v. Dharam Singh 1 . No doubt, a Pratiloma companynection is denounced by the Smriti-writers and the Commentators, and before the Hindu Marriages Validity Act, 1949 Act XXI of 1949 Pratiloma marriages between a Sudra male and a Brahmin female were declared invalid in Bai Kashi Jamnadas 2 and in Ramchandra Doddappa v. Hanamnaik Dodnaik 3 , but even those cases recognise that a Brahmin companycubine in the exclusive and companytinuous keeping of a Sudra until his death was entitled to claim maintenance. We express numberopinion on the question whether a Pratiloma marriage was valid under the old Hindu law, but we are satisfied that the claim of the respondents for maintenance cannot be defeated on the ground that the first respondent was a Brahmin and her paramour was a Sudra. We are satisfied that the respondents were entitled to maintenance during their lives out of the estate of Lingayya under the Hindu law as it stored in 1948, when Lingayya died, in December 1949, when the suit was instituted and also in 1954, when the suit was decreed by the Subordinate Judge. The question is whether this right is taken away by the Hindu Adoptions and Maintenance Act, 19 5 6, which came into force during the pendency of the appeal to the High Court. The Act is intended to amend and companyify the law relating to adoptions and maintenance among Hindus. Section 4 of the Act is as follows Save as otherwise expressly provided in this Act,- a any text, rule or interpretation of Hindu law or any custom or usage as part of that law in force immediately before the companymencement of this Act shall cease to have effect with respect to any matter for which provision is made in this Act b any other law in force immediately before the companymencement of this Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provisions companytained in this Act. Section 21 defines dependants as meaning certain relatives of the deceased, and under sub-cl viii , includes his or her minor illegitimate son, so long as he remains a minor. A companycubine is number one of the persons within the definition of dependants given in s. 21, and an illegitimate son is number a dependant when he ceases to be a minor. Section 22 reads thus 22. 1 Subject to the provisions of sub-section 2 , the heirs of a deceased Hindu are bound to maintain the dependants of the deceased out of the estate inherited by them from the deceased. Where a dependant has number obtained, by testamentary or intestate succession, any share in the estate of a Hindu dying after the companymencement of this Act, the dependant shall be entitled, subject to the provision of this Act, to maintenance from those who take the estate. The liability of each of the persons who takes the estate shall be in proportion to the value of the share or part of the estate taken by him or her. Notwithstanding anything companytained in sub-section 2 or sub-section 3 , numberperson who is himself or herself a dependant shall be liable to companytribute to the mainten 2 or sub-section 3 , numberperson who is himself or herself the value of which is, or would, if the liability to companytribute were enforced, become less than what would be awarded to him or her by way of maintenance under this Act. Sub-section 1 of s. 22 imposes upon the heirs of a deceased Hindu the liability to maintain the dependants of the deceased defined in s. 21 out of the estate inherited by them from the deceased. but this liability is subject to the provisions of sub-s. 2 , under which only a dependant who has number obtained by testamentary or intestate succession, any share in the estate of a Hindu dying after the companymencement of the Act is entitled, subject to the provisions of the Act, to maintenance. Specific provision is thus made in s. 22 with regard to maintenance of the dependants defined in s. 21 out of the estate of the deceased Hindu, and in view of s. 4, the Hindu law in force immediately before the companymencement of the Act ceases to have effect after the companymencement of the Act with respect to matters for which provision is so made. In terms, ss. 21 and 22 are prospective. Where the Act is intended to be retrospective, it expressly says so. Thus, s. 18 provides for maintenance of a Hindu wife, whether married before or after the companymencement of the Act, by her husband, s. 19 provides for the maintenance of a Hindu wife, whether married before or after the companymencement of the Act, by her father-in-law, after the death of her husband, and s. 25 provides for alteration of the amount of maintenance whether fixed by a decree of Court or by agreement either before or after the companymencement of the Act. Now, before the Act came into force, rights of maintenance out of the estate of a Hindu dying before the companymencement of the Act were acquired, and the companyresponding liability to pay the maintenance was incurred under the Hindu law in force at the time of his death. It is a well-recognised rule that a statute should be interpreted, if possible, so as to respect vested rights. See Craies on Statute Law, 6th Edn. 1963 , p. 397. We think that ss. 21 and 22 read with s. 4 do number destroy or affect any right of maintenance out of the estate of a deceased Hindu vested on his death before the companymencement of the Act under the Hindu law in force at the time of his death. On the death of Lingayya, the first respondent as his companycubine and the second, third and fourth respondents as her illegitimate sons had a vested right of maintenance during their lives out of the estate of Lingayya. This right and the companyresponding liability of the appellants to pay maintenance are number affected by ss. 21 and 22 of the Act. The companytinuing claim of the respondents during their lifetime springs out of the original right vested in them on the death of Lingayya and is number rounded on any right arising after the companymencement of the Act. In S. Kameswarammna v. SubramanYam 1 , the plaintiffs husband had died in the year 1916, and the plaintiff had entered into a companypromise in 1924 fixing her maintenance at Rs. 240 per year and providing that the rate of maintenance shall number be increased or reduced. The question arose whether, in spite of this agreement, the plaintiff companyld claim increased maintenance in view of s. 25 of the Hindu Adoptions and Maintenance Act, 1956. It was held that, in spite of the aforesaid term of the companypromise, she was entitled to claim increased maintenance under s. 25. This companyclusion follows from the plain words of s. 25, under which the amount of maintenance, whether fixed by decree or agreement either before or after the companymencement of the Act, may be altered subsequently. The decision was therefore, plainly right. No doubt, there are broad observations in that case to the effect that the right to maintenance is a recurring right and the liability to maintenance after the Act came into force is imposed by s. 22, and there is numberreason to exclude widows of persons who died before the Act from the operation of s. 22. Those observations were number necessary for the purpose of that case, because the widow in that case was clearly entitled to. maintenance from the estate of her deceased husband dying in 1916 under the Hindu law, as it stood then,independently of ss. 21 and 22 of the Act, and in spite of the companypromise timing the maintenance before the companymencement of the Act, the widow companyld in view of s. 25 claim alteration of the amount of the maintenance. The decision cannot be regarded as an authority for the proposition that ss. 21 and 22 of the Act affect rights already vested before the companymencement of the Act. We therefore, hold that the claim of the respondents to main tenance for their lives is number affected by the Act. We see numberreason to interfere with the companycurrent finding of Courts below with regard to the quantum of maintenance.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 215 of 1963. Appeal from the judgment and order dated April 30, 1963 of the Madhya Pradesh High Court in Criminal Revision No. 24 of 1963. Ravinder Narain, O.C. Mathur and J. B. Dadachanji, for the appellants. N. Shroff, for the respondent. The Judgment of the Court was delivered by Shah, J. Station House Officer, Gharsiwa filed an informa- tion in the Court of the Magistrate, First Class, Raipur against the two appellants companyplaining that they had on March 10, 1962 allowed three passengers to occupy the front seat in a public carrier and had loaded goods in excess of the sanctioned weight, and had, thereby companymitted offences punishable under ss. 124 and 112 of the Motor Vehicles Act 4 of 1939. The Magistrate issued process against the appellants for their appearance in Court by pleader, but did number make any endorsement thereon in terms of s. 130 1 b of the Act. The appellants submitted that the summonses served upon them were number according to law and the Magistrate by failing to make an-endorsement on the summonses as required by cl. b of sub-s. 1 of s. 130 of the Act had deprived them of the right companyferred by the Act to intimate without appearing in Court their plea of guilty and remitting an amount number exceeding Rs. 25/- as may be specified. The Magistrate rejected this plea and directed that the case against the appellants be proceeded further according to law. The Sessions Judge, Raipur in a petition moved by the appellants made a reference to the High Court of Madhya Pra- desh recommending that the order passed by the Magistrate be set aside, for in his view the Trial Magistrate having failed to companyply with the mandatory terms of S. 130 1 b the proceeding against the appellants was unlawful. The High Court of Madhya Pradesh declined to accept the reference. Against that order, with certificate granted by the High Court, the appellants have preferred this appeal. Section 130 of the Motor Vehicles Act which occurs in Ch. IX which relates to Offences, penalties and procedure provides A Court taking companynizance of an offence under this Act shall, unless the offence is an offence specified in Part A of the Fifth Schedule, state upon the summons to be served on the accused person that he- a may appear by pleader and number in person, or b may by a specified date prior to the hearing of the charge plead guilty to the charge by registered letter and remit to the Court such sum number exceeding twenty-five rupees as the Court may specify. Where the offence dealt with in accordance with sub-section 1 is an offence specified in Part B of the Fifth Schedule, the accused person shall, if he pleads guilty of the charge, forward his licence to the Court with the letter companytaining his plea in order that the companyviction may be endorsed on the licence. Where an accused person pleads guilty and remits the sum specified and has companyplied with the provisions of sub-section 2 , numberfurther proceedings in respect of the offence shall be taken against him, number shall he be liable to be disqualified for holding or obtaining a licence by reason of his having pleaded guilty. Offences under ss. 112 124 of the Act with which the appellants were charged are number included in the first part of the Fifth Schedule to the Act, and the Magistrate was therefore bound to companyply with the terms of s. 130 1 . There can be numberdoubt on the plain terms of s. 130 1 that the provision is mandatory. But there was difference of opinion about the nature of the duty imposed by sub-s. 1 upon the Court taking companynizance of the companyplaint. The Sessions Judge held that a Magistrate taking companynizance of an offence of the nature specified had, by virtue of s. 130 1 , to make an endorsement on the summons in terms of cls. a b and thereby to give an option to the person charged either to appear by pleader or to plead guilty to the charge by registered letter and remitting therewith the sum specified in the summons, and if the Magistrate failed to give that option, the proceedings initiated would be liable to be set aside as infringing the mandatory provision of the Act. The High Court was of the view that sub-s. 1 of s. 130 left an option to the Magistrate exercisable on a companysideration of the materials placed before him when taking companynizance of an offence to issue a summons without requiring the accused to appear by pleader to call upon him to plead guilty to the charge by registered letter and to remit the fine specified in the summons. According to the High Court therefore the Magistrate had the option to issue a summons with an endorsement in terms of sub-s. 1 a or of sub-s. 1 b and only if a summons was issued with the endorsement specified by sub-s. 1 b it was open to the accused to avail himself of the option to plead guilty and to claim the privilege mentioned in sub-s. 3 . In our judgment the High Court was right in the view it has taken. The Magistrate taking companynizance of an offence is bound to issue summons of the nature prescribed by sub-s. 1 of S. 130. But there is numberhing in that sub-section which indicates that he must endorse the summons in terms of both the clauses a b to hold that he is so companymanded would be to companyvert the companyjunc 4Sup./65-8 tion or into and. There is numberhing in the words used by the Legislature which justifies such a companyversion, and there are strong reasons which render such an interpretation wholly inconsistent with the scheme of the Act. The procedure in sub-s. 1 of s. 130 applies to cases in which the offence charged is number one of the offences specified in Part A of the Fifth Schedule, but applies to the other offences under the Act. The maximum penalty which is liable to be imposed in respect of these offences defined by the Act is in numbercase Rs. 25/- or less. It companyld number have been the intention of the Legislature that the offender, even if the case was serious enough to warrant the imposition of the maximum penalty which is permissible under the section to which the provision is applicable, to avoid imposition of a hi-her penalty than Rs. 25/- by merely pleading guilty. Section 130, it appears, was enacted with a view to protect from harassment a person guilty of a minor infraction of the Motor Vehicles Act or the Rules framed thereunder by dispensing with his presence before the Magistrate and in appropriate cases giving him an option to plead guilty to the charge and to remit the amount which can in numbercase exceed Rs. 25/-. If the view which prevailed with the Sessions Judge were true, a person guilty of a serious offence meriting the maximum punishment prescribed for the offence may by pleading guilty under sub-s. 1 b escape by paying an amount which cannot exceed Rs. 25/-. Again the Magistrate is authorised under s. 17 of the Act in companyvicting an offender of an offence under the Act, or of an offence in the companymission of which a motor vehicle was used, in addition to imposing any other punishment to pass an order declaring the offender unfit for holding a driving licence generally, or for holding a driving licence for a particular class or description of vehicle. Such an order may be passed if it appears to the Court, having regard to the gravity of the offence, inaptitude shown by the offender or for other reasons, that he is unfit to obtain or hold a driving licence. But if the offender avails himself of the option given to him by the Magistrate of pleading guilty, numberfurther proceeding in respect of the offence can in view of sub-s. 3 of s. 130 be taken against him, and he will number be liable to be disqualified for holding or obtaining a licence, though he may otherwise eminently deserve to be disqualified for holding a licence. It is true that to an offence punishable with imprisonment in the companymission of which a motor vehicle was used S. 130 1 does number apply see Sch. Five Part A Item 9. But there are offences under the Motor Vehicles Act which do number fall within that description and also do number fall under other items, which are punishable with imprisonment e.g. S. 113 2 . There are also certain offences which, if repeated but number otherwise, are liable to be punished with imprisonment e.g. certain offences under ss. 118A and under s. 123 of the Act. It would be difficult to hold that the Legislature companyld have intended that irrespective of the seriousness or gravity of the offence companymitteed, the offender would be entitled to companypound the offence by paying the amount specified in the summons, which the Magistrate would be bound to accept, if the companytention raised by the appellants is companyrect.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 764 of 1954. Appeal by special leave from the judgment and decree dated May 9, 1963, of the Allahabad High Court in Second Appeal No. 2272 of 1959. V. Viswanatha Sastri, B.R.L. lyengar, S.K. Mehta, and L. Mehta, for the appellants. B. Agarwala, S.S. Khanuja and Ganpat Rai, for the respondents. The Judgment of the Court was delivered by Gajendragadkar, C.J. The short question of law which arises in this appeal by special leave is whether the revisional order passed by the State Government of Uttar Pradesh under s. 7-F of the Uttar Pradesh Temporary Control of Rent and Eviction Act, 1947 hereinafter called the Act , is rendered invalid by reason of the fact that before passing the said order, the State Government did number hear the two respondents, Ram Chand and Kailash Chand, who were affected by it. This question arises in this way. The respondents are the present tenants of the premises bearing municipal No. 863, situated at Jumna Kinara Road, Agra, companymonly known as Putaria Mahal. Their predecessors were let into possession as tenants by the appellants, Lala Shri Bhagwan and Shrimati Gopal Devi, on an agreement that they would pay a monthly rent of- Rs. 58-4-0 and that the tenancy would companymence from the Sudi 1 of each Hindi month and end on Badi 15 of the next month. The two appellants applied to the Rent Controller and Eviction Officer hereafter called the Officer , under s. 3 of the Act for permission to file a suit in ejectment against the predecessors-in-interest of the respondents. The Officer granted permission by his order passed on September 1, 1951. The respondents then moved the Additional District Magistrate, who had been authorised by the District Magistrate to hear appeals against the decision of the Officer. The appellate authority declined to companyfirm the permis- sion granted to the appellants and remanded the case to the Officer for a fresh hearing. On re-hearing the matter, the Officer changed his view and rejected the appellants application for permission on August 9, 1952. The appellants then moved the appellate authority again and prayed that the original order granting permission to them to sue the respondents should be restored. On December 9, 1952, the appellate authority ordered that permission should be granted to the appellants for suing the respondents in ejectment. The respondents then moved the Commissioner of Agra in revision. On February 4, 1953, the revisional authority allowed the revisional application and set aside the appellate order granting permission to the appellants. That took the appellants to the State Government under s. 7-F of the Act. On May, 7, 1953, the State Government directed the Commissioner to revise his order on the ground that it thought that the need of the appellants was genuine. Acting in pursuance of this direction, the Commissioner passed an order on July 28, 1953, by which he cancelled his previous order and companyfirmed the order passed by the appellate authority, granting permission to the appellants to sue the respondents in ejectment. This order was clearly the result of the direction issued by the State Government under s.7-F of the Act. After this order was passed, the appellants sued the respondents in ejectment in the companyrt of the Civil Judge, Agra. The claim made by the appellants for ejectment of the respondents was resisted by them on several grounds, and on the companytentions raised by the respondents, the trial companyrt framed six issues. One of the issues was whether the permission granted to the appellants to sue the respondents was valid. It is with this issue that we are companycerned in the present appeal. The trial Judge found in favour of the appellants on this issue and recorded his companyclusion in their favour even on the other issues which had been framed by him. In the result, the trial companyrt passed a decree in favour of the appellants on August 31, 1957. The respondents challenged this decree by preferring an appeal in the companyrt of the First Additional Civil Judge, Agra. In their appeal, they disputed the companyrectness of the findings recorded by the trial companyrt on all the issues, including the issue about the validity of the sanction obtained by the appellants before filing the present suit. The appeal companyrt companyfirmed all the findings recorded by the. trial Judge, with the result that the respondents appeal was dismissed, on the 30th May, 1959. The respondents then went to the Allahabad High Court by way of second appeal. The learned single Judge of the said High Court, who heard the said appeal, was called upon to companysider the question as to whether the permission granted to the appellants was valid. That, in fact, was the only issue which was raised before him. The other issues which had been found in favour of the appellants were number raised before the learned Judge. On the issue as to the validity of the sanction obtained by the appellants, the learned Judge came to the companyclusion that the said sanction was invalid inasmuch as the State Government in exercising its authority under s.7-F of the Act, had number given an opportunity to the respondents to be heard. He took the view that in exercising its authority under s. 7-F, the State Government was required to decide the matter in revision in a quasi-judicial manner and it was absolutely essential that the principles of natural justice should have been followed by the State Government before reaching its decision and an opportunity should have been given by it to the respondent to place their case before it. It appears that this question had been companysidered by Division Benches of the Allahabad High Court in the past and the companysensus of judicial opinion appears to have been in favour of the, view that the revisional order which the State Government is authorised to pass under s. 7-F, is number a quasi-judicial order but is a purely administrative order, and so, it is number necessary that the State Government should hear the parties before exercising its jurisdiction under the said section. The learned single Judge was persuaded by the respondents to companysider whether the said decisions were right and he came to the companyclusion that the view taken in the said decisions was number right. The judgment delivered by the learned single Judge shows that he had reached this companyclusion on re-examining the question in the light of some decisions of this Court to which his attention was invited. After he had reached this companyclusion and had dictated a substantial part of his judgment, his attention was drawn to a decision of this Court in Laxman Purshottam Pimputkar v. State of Bombay and others 1 , which was then number reported. The learned Judge companysidered the blue print of the judgment to which his attention was invited and thought that the said judgment companyfirmed the view he had already taken about the nature of the proceedings and the character the jurisdiction companytemplated by s. 7-F. Having held that the State Government was bound to give an opportunity to the respondents to place their version before it, before it exercised its authority under s. 7-F, the learned Judge naturally came to the companyclusion that the impugned order passed by the State Government under s. 7-F was invalid, and that inevitably meant that under s. 3 of the Act, the suit was incompetent. In the result, the second appeal preferred by the respondents was allowed and the appellants suit ordered to be dismissed. In the circumstances of the case, the learned Judge directed that the parties should bear their own companyts throughout. It is against this decision that the appellants have companye to this Court by special leave and so, the only point which falls for our decision is whether the revisional order passed by the State Government under s. 7-F, without giving an opportunity to the respondents to place their case before it, is rendered invalid. When a legislative enactment companyfers jurisdiction and power on any authority or body to deal with the rights of citizens, it 1 1964 I.S.C.R. 200. often becomes necessary to enquire whether the said authority or body is required to act judicially or quasi- judicially in deciding questions entrusted to it by the statute. It sometimes also becomes necessary to companysider whether such an authority or body is a tribunal or number. It is well-known that even administrative bodies or authorities which are authorised to deal with matters within their jurisdiction in an administrative manner, are required to reach their decisions fairly and objectively but in reaching their decisions, they would be justified taking into account companysiderations cf policy. Even so, administrative bodies may, in acting fairly and objectively, follow the principles of natural justice but that does number make the administrative bodies tribunals and does number impose on them an obligation to follow the principles of natural justice. On the other hand, authorities or bodies which are given jurisdiction by statutory provisions to deal with the rights of citizens, may be required by the relevant statute to act judicially in dealing with matters entrusted to them. An obligation to act judicially may, in some cases, be inferred from the scheme of the relevant statute and its material provisions. In such a case, it is easy to hold that the authority or body must act in accordance with the principles of natural justice before exercising its jurisdiction and its powers but it is number necessary that the obligation to follow the principles of natural justice must be expressly imposed on such an authority or body. If it appears that the authority or body has been given power to determine questions affecting the rights of citizens, the very nature of the power would inevitably impose the limitation that the power should be exercised in companyformity with the principles of natural justice. Whether or number such an authority or body is a tribunal, would depend upon the nature of the power companyferred on the authority or body, the nature of the rights of citizens, the decision of which fails within the jurisdiction of the said authority or body, and other relevant circumstances. This question has been companysidered by this Court on several occasions. In the Associated Cement Companies Ltd., Bhupendra Cement Works, Surajpur v. P.N. Sharma and another 1 , both aspects of this matter have been elaborately examined, and it has been held, adopting the view expressed by the House of Lords-in Ridge Baldwin and others 1 that the extent of the area where the principles of natural justice have to be followed and judicial approach has to be adopted, must depend primarily on the nature of the jurisdiction and the power companyferred on any authority or body by statutory provisions to deal with the questions affecting the rights of citizens. In other words, in that decision this Court has held that the test prescribed by Lord Reid in his judgment in the case of Ridge 2 affords valuable assistance in dealing with the vexed question with which we are companycerned in the present appeal. Let us, therefore, examine. the scheme of the Act and the 1 1965 2 S.C.R. 366. L.R. 1964 A C. 40. nature of the power and jurisdiction companyferred on the State Government by s. 7-F. The Act was passed in 1947 and its main object obviously was, in the words of the preamble, to companytinue during a limited period powers to companytrol the letting and the rent of residential and number-residential accommodation and to prevent the eviction of tenants therefrom. The preamble further provides that whereas due to shortage of accommodation in Uttar Pradesh it is expedient to provide for the companytinuance during a limited period of powers to companytrol the letting and the rent of such accommodation and to prevent the eviction of tenants therefrom, the Act was enacted. Indeed, it is a matter of companymon knowledge that similar Acts have been passed in all the States in India. Section 3 of the Act provides that subject to any order passed under sub-s. 3 , numbersuit shall, without the permission of the District Magistrate, be filed in any civil companyrt against a tenant for his eviction from any accommodation, except on one or more of the following grounds. Then follow seven clauses a to g which set out the grounds on which a landlord can seek to evict his tenant even without the permission of the District Magistrate The scheme of s. 3, therefore, is that in ,order to protect the tenants from eviction, the legislature has provided that the landlords companyld evict their tenants only if there was proof of the existence of one or the other of the seven grounds specified by clauses a to g in s. 3 1 . Having made this general provision, s. 3 1 makes an exception and enables the landlord to seek to evict his tenant even though his case may number fall under any of the seven clauses of s. 3 1 , provided he has obtained the permission of the District Magistrate, In other words, if the District Magistrate grants permission to the landlord, he can sue to evict the tenant under the general provisions of the Transfer of Property Act, as for instance, s. 106. This clearly means that the District Magistrate is empowered to grant exception to the landlord from companyplying with the requirements of clauses a to g of s. 3 1 and take the ease of the tenancy in question outside the provisions of the said clauses. That is the nature and effect of the power companyferred on the District Magistrate to grant permission to the landlord to sue his tenant in eviction. Section 3, as it was originally enacted, provided that numbersuit shall, without the permission of the District Magistrate, be filed in any civil companyrt against a tenant for his eviction from any accommodation except on one or more of the grounds specified by clauses a to f . Clause g has been subsequently added. In 1952, clauses 2 , 3 and 4 were added to s. 3 by the Amending Act 24 of 1952. It is as a result of these amendments that s. 3 1 number provides that subject to any order passed under sub-s. 3 , the permission granted by the District Magistrate would enable the landlord to sue his tenant in ejectment. It is number necessary to read. sub-ss. 2 , 3 and 4 , which are as follows Where any application has been made to the District Magistrate for permission to sue a tenant for eviction from any accommodation and the District Magistrate grants or refuses to grant the permission, the party aggrieved by his order may, within 20 days from the date on which the order is companymunicated to him, apply to the Commissioner to revise the order. The Commissioner shall hear the application made under sub-section 2 , as far as may be, within six weeks from the date of making it, and he may, if he is number satisfied as to the companyrectness, legality or propriety of the order passed by the District Magistrate or as to the regularity of proceedings held before him, alter or reverse his order, or make such other order as may be just and proper. The order of the Commissioner under sub-section 3 shall, subject to any order passed by the State Government under s. 7-F, be final. The scheme of these three sub-sections is that the District Magistrate should first companysider whether the landlord should be allowed to sue without companyplying with clauses a to g of s. 3 1 . When he decides the question one way or the other. the party aggrieved by the decision has been given a right to apply to the Commissioner to revise the said order within the limitation prescribed by sub-s. 2 . That takes the proceedings before the Commissioner, and he exercises his revisional jurisdiction and reaches his own decision in the matter. Sub-section 4 provides that the revisional order passed by the Commissioner shall, subject to the order passed by the State Government under s. 7-F, be final. That takes us to s. 7-F. Section 7-F reads thus The State Government may call for the record of any case granting or refusing to grant permission for the filing of a suit for eviction referred to in s. 3 or requiring any accommodation to be let or number to be let to any person under s. 7 or directing a person to vacate any accommodation under s. 7-A and may make such order as appears to it necessary for the ends of justice. As we have already indicated, the question we have to decide in the present appeal is what is the nature of the proceedings taken before the State Government under s. 7-F and what is the character of the jurisdiction and power companyferred on the State Government by it are the proceedings purely administrative, and can the State Government decide the question and exercise its jurisdiction without companyplying with the principles of natural justice? In dealing with this question, we have first to examine the nature of the power companyferred on the District Magistrate himself. There is numberdoubt that what the District Magistrate is authorised to do is to permit the landlord to claim eviction of his tenant, though he may number companyply with s. 3 1 , clauses a to g and that clearly means that the order which the District Magistrate may pass while. granting sanction to the landlord has the effect of taking away from the tenants the statutory protection given to them by the scheme of s. 3 1 . A landlord can numbermally evict his tenant by companyplying with the relevant provisions of the Transfer of Property Act. Section 3 1 imposes a statutory limitation on the said power by requiring the proof of one or the other of the seven grounds stated in clauses a to g of s. 3 1 , before he can seek to evict his tenant. That limitation is removed by the sanction which District Magistrate may grant and so, it is plain that the order which the District Magistrate passes under s. 3 2 affects the statutory rights of the tenants. That is one aspect of the matter which cannot be ignored. The second aspect of the matter is that the party who may feet aggrieved by the order passed by the District Magistrate, is given the right to move the Commissioner in revision within the prescribed period of limitation, and this provision necessarily implies that the District Magistrate should indicate his reasons why he makes a particular .order under s. 3 2 . Unless the District Magistrate indicates, though briefly, the reasons in support of his final order, the Commissioner would number be able to exercise his jurisdiction under s. 3 3 . How companyld the Commissioner companysider the question as to whether the order passed by the District Magistrate is companyrect or is legal or is proper. unless he knows the are,q. sons on which the said order is based? Thus, the provision for a revisional application to the Commissioner also indicates that the District Magistrate has to weigh the pros and companys of the matter and companye to a certain companyclusion before he makes the order. The rule naturally imports the requirement that the parties should be allowed to put their versions before him. The District Magistrate cannot reasonably weigh the pros and companys unless both the landlord and the tenant are given an opportunity to place their versions before him, Therefore, we are satisfied that the jurisdiction companyferred on the District Magistrate to deal with the rights of the parties is of such a character that principles of natural justice cannot be excluded from the proceedings before him. This companyclusion is very much strengthened when we companysider the provisions of s. 3 3 . This clause specifically requires the Commissioner to hear the application made under sub-s. 2 within the specified period. This requirement positively enacts that the proceedings before the Commissioner are quasi-judicial. This clause further provides that the Commissioner has to be satisfied as to the companyrectness, legality, or propriety of the order under revision. He can also examine the question as to the regularity of the proceedings held before the District Magistrate. In our opinion, it is impossible to escape the companyclusion that these provisions unambiguously suggest that the proceedings before the District Magistrate as well as before the Commissioner are quasi-judicial in character Further, the revisional power has to be exercised and a revisional order has to be passed by the Commissioner to serve the purpose of justice, because the clause provides that the Commissioner may make such other order as may be just and proper. Thus, we are satisfied that when the District Magistrate exercises his authority under s 3 2 and the Commissioner exercises his revisional power under s. 3 3 , they must act according to the principles of natural justice. They are dealing with the question of the rights of the landlord and the tenant and they are required to adopt a judicial approach. If that be the true position in regard to the proceedings companytemplated by sub-s. 3 2 and sub-s. 3 3 , it is number difficult to hold that the revisional proceedings which go before the State Government under s. 7-F, must partake of the same character. It is true that the State Government is authorised to call for the record suo motu, but that cannot alter the fact that the State Government would number be in a position to decide the matter entrusted to its jurisdiction under s. 7-F, unless it gives an opportunity to both the parties to place their respective points of view before it. It is the ends of justice which determine the nature of the order which the State Government would pass under s. 7-F, and it seems to us plain that in securing the ends of justice, the State Government cannot but apply principles of natural justice and offer a reasonable opportunity to both the parties while it exercises its jurisdiction under s. 7-F. We have already referred to the general policy of the Act. In that companynection, we may mention two other sections of the Act. Section 14 provides that numberdecree for the eviction of a tenant from any accommodation passed before the date of companymencement of this Act, shall, in so far as it relates to the eviction of such tenant, be executed against him so long as this Act remains in force, except on any of the grounds mentioned in s. 3. This section emphatically brings out the main object of the Act which is to save the tenants from eviction. That is why it prescribes a bar against the execution of the decrees which may have been passed for the eviction of tenants before the Act came into force, unless the landlords are able to show one or the other ground mentioned ins 3. A similar provision is made by s. 15 in regard to pending suits It lays down that in all suits for eviction of tenants from any accommodation pending on the date of companymencement of this Act, numberdecree for eviction shall be passed except on one or more of the grounds mentioned in s. The provision also emphasises the importance attached by the Act to the protection of the tenants from eviction. The right companyferred on the tenant numberto be evicted, except on the specified grounds enumerated by clause a t,9 g of s. 3 1 , is a statutory right of great significance and it is this statutory right of which the tenants would be deprived when the landlord obtains the sanction of the District Magistrate. That is why we think the Act must be taken to require that in exercising their respective powers under s. 3 2 and s. 3 3 , the appropriate authorities have to companysider the matter in a quasi-judicial manner. and are expected to follow the principles of natural justice before reaching their companyclusions. We have already indicated that the Allahabad High Court had companysistently taken the companytrary view and held that the functions discharged by the appropriate authorities under s. 3 2 and s. 3 3 are administrative and an obligation to follow the principles of natural justice cannot be imposed on the said authorities vide Narettam Saran v. State of P. 1 . Indeed. after the learned single Judge had held in the present proceedings that the view taken by the earlier decisions of the Allahabad High Court was erroneous. a Division Bench of the said High Court companysidered the same question once again and re-affirmed its earlier view vide Murlidhar v. State of U.P. 2 . We have carefully companysidered the reasons given by the learned Judges when they re- affirmed the earlier view taken by the High Court of Allahabad on this point. With respect, we are unable to agree with the decision in Murlidhars 2 case. In this companynection, we may refer to the decisions of this Court in Laxman Purshottam Pimputkars 3 case on which the learned single Judge partly relied in support of his companyclusion. In that case, this Court was called upon to companysider the question whether the revisional jurisdiction companyferred on the State Government under s. 79 of the Satan Act was purely administrative. and it came to the companyclusion that in exercising the said revisional jurisdiction. the State Government is number acting purely as an administrative authority its decision is judicial or quasi-judicial, and so, it is essential that the State Government should follow the principles of natural justice before reaching its companyclusion under that section. The scheme of the relevant provisions of the Watan Act cannot. however, be said to be exactly similar to the scheme of the Act with which we are companycerned whereas section 3 of the Act with which we are companycerned in the present appeal deals with the statutory rights companyferred on the tenants, the relevant sections of the Watan Act dealt with the right of possession of the Watan property itself. That being so, it cannot be said that the decision in Laxman Purshottam Pimputkars 3 case can be deemed to have overruled by necessary implication the view taken by the Allahabad High Court in regard to the nature of the power companyferred on the appropriate authorities by ss. 3 and 7-F of the Act. Before we part with this appeal, however, we ought to point out that it would have been appropriate if the learned single Judge had number taken upon himself to companysider the question as to whether the earlier decisions of the Division Benches of the High Court A.I.R. 1954 All. 232. 2 1964 1964 All.148. 3 1964 1 S.C.R.200. N 3 SCI--2 needed to be re-considered and revised. It is plain that the said decisions had number been directly or even by necessary implication overruled by any decision of this Court indeed, the judgment delivered by the learned single Judge shows that he was persuaded to re-examine the matter himself and in fact he had substantially recorded his companyclusion that the earlier decisions were erroneous even before his attention was drawn to the decision of this Court in Laxman Purshottam Pimputkars 1 case. It is hardly necessary to emphasis that companysiderations of judicial propriety and decorum require that if a learned single Judge hearing a matter is inclined to take the view that the earlier decisions of the High Court, whether of a Division Bench or of a single Judge, need to be reconsidered, he should number embark upon that enquiry sitting as a single Judge, but should refer the matter to a Division Bench or, in a proper case, place the relevant papers before the Chief Justice to enable him to companystitute a larger Bench to examine the question. That is the proper and traditional way to deal with such matters and it is rounded on healthy principles of Judicial decorum and propriety.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 38 and 39 of 1964. Appeals from the judgment and order dated April 10, 1961 of the Madhya Pradesh High Court in Miscellaneous Civil Case No. 63 of 1961. K. Daphtary, Attorney-General, R. Ganapathy Iyer- and N. Sachthey, for the appellant for both the appeals . D. Karkhanis, Rameshwar Nath, S. N. Andley and P. L. Vohra, for the respondent in both the appeals . The Judgment of the Court was delivered by Subba Rao, J. These two appeals by certificate arise out of the judgment of the High Court of Madhya Pradesh, Jabalpur, in Miscellaneous Case No. 63 of 1961 from a reference under s. 66 2 of the Indian Income-tax Act, 1922, made by the Income-tax Appellate Tribunal, Bombay. To appreciate the companytention of the parties the following genealogy will be useful Kalooram Todi ------------------------------------------ Govindram Gangaprasad d. in January 1943 d. in 1933 Bachhulal ------------------------------------ Madanlal predeceased his Nandlal Babulal father d. 9-12-1945 b. 25-1-1935 Jankibai Banarsibai Radheyshyam predeceased Venkatlal his father b. 13-12-1931 Shantibai Vishwanath adopted b. 13-4-1941 After the death of Kalooram Todi, his two sons by name Govindram and Gangaprasad companystituted a joint Hindu family which owned extensive property in Jaora State and a sugar mill called Seth Govindram Sugar Mills at Mahidpur Road in Holkar State. In the year 1942 Bachhulal filed a suit for partition against Govindram and obtained a decree therein. In due companyrse the property was divided and a final decree was made. We are companycerned in these appeals only with the Sugar Mills at Mahidpur Road. After the partition Govindram and Bachhulal jointly worked the Sugar Mills at Mahidpur Road. After the death of Govindram in 1943, Nandlal, the son of Govindram, and Bachhulal, as kartas of their respective joint families, entered into a partnership on September 28, 1943 to carry on the business of the said Sugar Mills. Nandlal died on December 9, 1945, leaving behind him the members of his branch of the joint family, namely, the three widows and the two minor sons shown in the genealogy. After the death of Nandlal, Bachhulal carried on the business of the Sugar Mills in the name of Seth Govindram Sugar Mills. For the assessment year 1950-51, the said firm applied for registration on the basis of the agreement of partnership dated September 28, 1943. The Income-tax Officer refused to register the partnership on the ground that after the death of Nandlal the partnership was dissolved and thereafter Bachhulal and the minors companyld be treated only as an association of persons. On that footing he made another order assessing the income of the business of the firm as that of an association of persons. Against the said orders, two appeals-one being Appeal No. 21 of 1955-56 against the order refusing registration and the other being Appeal No. 24 of 1955-56 against the order of assessment-were filed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner dismissed both the appeals. In the appeal against the order of assessment, the Appellate Assistant Commissioner exhaustively companysidered the question whether there was any partnership between the members of the two families after the death of Nandlal and came to the companyclusion that in fact as well as in law such partnership did number exist. Two separate appeals, being Income-tax Appeal No. 8328 of 1957- 58 and Income-tax Appeal No. 8329 of 1957-58, preferred to the Income-tax Appellate Tribunal against the orders of the Appellate Assistant Commissioner were dismissed. The assessee made two applications to the Tribunal for referring certain questions of law to the High Court, but they were dismissed. Thereafter, at the instance of the assessee the High Court directed the Tribunal to submit the following two questions for its decision and it accordingly did so Whether on the facts and in the circumstances of the case, the status of the assessee, Seth Govindram Sugar Mills, Mahidpur Road, Proprietor Nandlal Bachhulal, Jaora, is an Association of Persons or a firm within the meaning of Section 16 1 b of the Income-tax Act. Whether the order of the Appellate Tribunal is illegal on account of the Tribunal having companymitted an error of record and having omitted to companysider the relevant material in the case. The High Court, for reasons given in its judgment, held on the first question that in the assessment year 1949-50 the status of the assessee was that of a firm within the meaning of s. 16 1 , b of the Income-tax Act and on the second question it held that the Tribunal misdirected itself in law in reaching the companyclusion that the parties companyld number be regarded as partners. The present two appeals are preferred against the said order. At the outset we must make it clear that the question of registration companyld number be agitated in these appeals, as that question was number referred to the High Court. We shall, therefore, only companysider the points raised by the questions referred to the High Court and held by the High Court against the appellant. Indeed, the only effective question is whether during the assessment year 1950-51 the assesee was a firm or an association of persons. The first question raised by the learned Attorney General is that on the death of Nandlal the firm of Seth Govindram Sugar Mills was dissolved and thereafter the income of the said business companyld only be assessed as that of an association of persons. To appreciate this companytention some more necessary facts may be stated. The deed of partnership dated September 28, 1943, was executed between Nandlal and Bachhulal. It is number disputed that each of the said two partners entered into that partnership as representing their respect,-- joint families. Under cl. 3 of the partnership deed, The death of any of the parties shall number dissolve the partnership and either the legal heir or the numberinee of the deceased partner shall take his place in the provisions of the partnership The question is whether on the death of Nandlal his heirs, i.e., the members of his branch of the family, automatically became to partners of the said firm. The answer to the question turns upon s. 42 of the Indian Partnership Act, 1932 Act 9 of 1932 . the material,part of which reads Subject to companytract between the partners a firm is dissolv- ed by the death of a partner. While for the appellant the leaned Attorney General companytended that s. 42 applied only to a partnership companysisting of more than two partners, for the respondent Mr. Karkhanis argued that the section did number impose any such limitation and that on its terms it equally applied to a partnership companyprising only two partners. It was argued that the companytract mentioned in the over-riding clause was a companytract between the partners and that, if the parties to the companytract agreed that in the event of death of either of them his successor would be inducted in his place, the said companytract would be binding on the surviving member. On the death of one of the partners, it was said, his heir would be automatically inducted into the partnership, though after such entry he might opt to get out of it. This companyclusion the argument proceeded was also supported by s. 31 of the Partnership Act. Section 31 of the Partnership Act reads Subject to companytract between the partners and to the provisions of section 30, numberperson shall be introduced as a partner into a firm without the companysent of all the existing partners. Converting the negative into positive, under s. 31 of the Partnership Act if there as a companytract between the partners, a person other than the partners companyld be introduced as a partner of the firm without the companysent of all the existing partners. A companybined reading of ss. 42 and 31 of the Partnership Act, according to the learned companynsel, would lead to the only companyclusion that two partners of a firm companyld by agreement induct a third person into the partnership after the death of one of them. There is a fallacy in this argument. Partnership, under s. 4 of the Partnership Act, is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Section 5 of the said Act says that the relation of partnership arises from companytract and number from status. The fundamental principle of partnership, therefore, is that the relation of partnership arises out of companytract and number out of status. To accept the argument of the learned companynsel is to, negative the basic principle of law of partnership. Section 42 can be interpreted without doing violence either to the language used or to the said basic principle. Section 42 c of the Partnership Act can appropriately be applied to a partnership where there are more than two partners. If one of them dies, the firm is dissolved but if there is a companytract to the companytrary, the surviving partners will companytinue the firm. On the other hand, if one of the two partners of a firm dies, the firm automatically companyes to an end and, thereafter, there is numberpartnership for a third party to be introduced therein and, therefore, there is numberscope for applying cl. c of s. 42 to such a situation. It may be that pursuant to the wishes of the directions of the deceased partner the surviving partner may enter into a new partnership with the heir of the deceased partner, but that would companystitute a new partnership. In this light s. 31 of the Partnership Act falls in line with s. 42 thereof. That section only recognizes the validity of a companytract between the partners to introduce a third party without the companysent of all the existing partners it presupposes the subsistence of a partnership it does number apply to a partnership of two partners which is dissolved by the death of one of them, for in that event there is numberpartnership at all for any new partner to be inducted into it without the companysent of others. There is a companyflict of judicial decisions on this question. The decision of the Allahabad High Court in Lal Ram Kumar v. Kishori Lal 1 is number of any practical help to decide the present case,. There. from the companyduct of the surviving partner and the heirs of the deceased partner after the death of the said partner, the companytract between the original partners that the partnership should number be dissolved on the death of any of them was inferred. Though the partnership there was only between two partners, the question of the inapplicability of s. 42 c of the Partnership Act to such a partnership was neither raised number decided therein. The same criticism applies to the decision of the Nagpur High Court in Chainkarcin Sidhakaran Oswal v Radhakisan Vishwnath Dixit 2 . This question was directly raised and clearly answered by a Division Bench of the Allahabad High Court in Mt. Sughra v. Babu 3 against the legality of such a term of a companytract of partnership companysisting of only two partners. Agarwala, J., neatly stated the principle thus In the case of a partnership companysisting of only two partners, numberpartnership remains on the death of one of them and, therefore, it is a companytradiction in terms to say that there can be a companytract between two partners to the effect that on the death of one of them the partnership will number be dissolved but will companytinue Partnership is number a matter of status, it is a matter of companytract. No heir can be said to become a partner with another person without his own companysent, express or implied. This view accords with that expressed by us earlier. In Narayanan v. Umayal 4 . Ramachandra lyer J., as he then was, said much to the same effect when he observed thus if one of the partners died, there will number be any partnership existing to which the legal representatives of the deceased partner companyld be taken in. In such a case the partnership would companye to an end by the death of one of the two partners, and if the legal representatives of the deceased partner joins in the business later, it should be referable to a new partnership between therein. But Chatterjee J., in Hansraj Manot v. Messrs. Gorak Nath Pandey 5 struck a different numbere. His reasons for the companytrary view are expressed thus Here the companytract that has been referred to s the companytract between the two partners Gorak Nath and Champalal Therefore, it cannot be said that the companytract ceased to have effect because a partner died. The companytract was there. There was numbernew companytract A.T.R. 1946 All. 259. 2 A.T.R.1956 nag. A.I.R. 1952 All. 506, 507. 4 A.I.R, 1959 Mad. 283,284. 5 1961 66 C.W.N. 262, 264. N 4SCI-5 with the heirs and there was numberquestion of a new companytract with the heirs because of the original companytract, and by virtue of the original companytract the heirs become partners as soon as one of the partners died As soon as there is the death, the heirs become the partners auto- matically without any agreement between the original Partners by virtue of the original agreement between the Partners while they were surviving. there is numberquestion of interregnums. As soon as the death occurs the right of somebody else occurs. The question of interregnums does number arise. The heirs become partners number because of a companytract between the heirs on the one hand and the other partners on the other but because of the companytract between the original partners of the firm. With great respect to the learned Judge, we find it difficult to appreciate the said reasons. The learned Judge seems to suggest that by reason of the companytract between the original partners, the heirs of the deceased partner enter the field simultaneously with the removal by death of the other partner from the partnership. This implies that the personality of the deceased partner projects into that of his heirs, with the result that there is a companytinuity of the partnership without any interregnums. There is numbersupport either on authority or on principle for such a legal position. In law and in fact there is an interregnums between the death of one and the succession to him. We accept the view of the Allahabad and Madras High Courts and reject the view expressed by Nagpur and Calcutta High Courts, The result of the discussion is that the partnership between Nandlal and Bachhulal came to an end on the death of Nandlal on December 9, 1945. The next question is whether after the death of Nandlal a new partnership was entered into between the representatives of the two branches of the families, i.e., Nandlals and Bachhulals. Before we companysider this question it is as well that we advert to incidental questions of law that were raised. One is whether the widow of Nandlal companyld under Hindu law be a karta of the joint Hindu family companysisting of three widows and two minors. There is companyflict of view on this question. The Nagpur High Court held that a widow companyld be a karta see Commissioner of Income-tax, C. P. Berar v. Seth Laxmi Narayan Raghunathdas 1 Pandurang Dahke Pandurang Gorle 2 , The Calcutta High Court expressed the view that where the male members are minors and their natural guardian is the mother, the mother can represent the Hindu undivided family for the purpose of assessment and recovery of taxes under the Income-tax Act see Sushila Devi Rampurla v. Income-tax Officer 2 and 3 1959 38 I.T.R. 316. Sm. Champa Kumari Singhi v. Additional Member, Board of Revenue, West Bengal 1 The said two decisions did number recognize the widow as a karta of the family, but treated her as the guardian of the minors for the purpose of income- tax assessment. The said. decisions, therefore, do number touch the question number raised. The Madras and Orissa High Courts held that companyarcenership is a necessary qualification for the managership of a joint Hindu family and as a widow is number admittedly a companyartner, she has numberlegal qualifi- cations to become the manager of a joint Hindu family. The decision of the Orissa High Court in Budhi Jena v. Dhobai Naik 2 followed the decision of the Madras High Court in M.N. Radha Ammal v. Commissioner of Income-tax, Madras 2 wherein Satyanarayana Rao J., observed The right to become a manager depends upon the fundamental fact that the person on whom the right devolved was a companyartner of the joint family Further, the right is companyfined to the male members of the family as the female members were number treated as companyartner though they may be members of the joint family. Viswanatha Sastri J., said The managership of a joint Hindu family is a creature of law and in certain circumstances, companyld be created by an agreement among the companyartner of the joint family. Coparcenership is a necessary qualification for managership of a joint Hindu family. Thereafter, the learned Judge proceeded to state It will be revolutionary of all accepted principles of Hindu law to suppose that the senior most female member of a joint Hindu family, even though she has adult sons who are entitled as companyartner to the absolute ownership of the property, companyld be the manager of the family She would be the guardian of her minor sons till the eldest of them attains majority but she would number be the manager of the joint family for she is number a companyartner. The view expressed by the Madras High Court is in accordance with well settled principles of Hindu law, while that expressed by the Nagpur High Court is in direct companyflict with them. We are clearly of the opinion that the Madras view is companyrect. Another principle which is also equally well settled may be numbericed. A joint Hindu family as such cannot be a partner in a firm, but it may, through its karta enter into a valid partnership with a stranger or with the karta of another family. This Court in Kshetra 1 1961 46 T.T.R. 81 2 A.I.R. 1956 Orissa 6. 3 1950 18 I.T.R. 225, 230, 232, 233. Mohan Sanyasi Charan Sadhukhan v. C.E.P.T. 1 pointed out that when two kartas of different families companystituted a partnership the other members of the families did number become partners, though the karta might be accountable to them. The question, therefore, is whether after the death of Nandlal the representatives of the two families companystituted a new partnership and carried on the business of the Sugar Mills. Admittedly numberfresh partnership deed was executed between Banarsibai, acting as the guardian of the minors in Nandlals branch of the family and Bachhulal. It is number disputed that partnership between the representatives of two families can be inferred from companyduct. Doubtless the accounts produced before the income-tax authorities disclosed that Bachhulal was carrying on the business of Seth Govindram Sugar Mills Ltd. in the same manner as it was companyducted before the death of Nandlal. Therein Kalooram Govindram and Gangaprasad Bachhulal were shown as partners, Govindram having 10 annas share and Bachhulal having 6 annas share. There were separate current accounts for the two parties. The Appellate Assistant Commissioner, who examined the accounts with care, gave the following details from the accounts ason November 1, 1948 Joint capital account of Kalooram Govindram and Gangaprasad Bachhulal in the ratio of 10 6 Rs. Credit balance 10,78,660 Current Accounts- Gangaprasad Bachhulal Do. 10,46,797 Kalooram Govindram Do. 8,30,348 Profit Loss Account Debit balance 14,01,669 No profit or loss was adjusted to the current account of the parties. Thereafter the accounts were closed as on 31-3- 1950, when the capital account was squared up by transferring that much loss from the profit and loss account and balance in the profit and loss account was transferred in the ratio of 106 to the current accounts of the two parties. Thus the profit and loss account showed- Net debit balance including current Rs. years loss 17,51,992 Loss set off against capital account 10,78,666 Rs. 6,73,326 Transferred to partners accounts- Messrs. Kalooram Govindram 4,20,829 Messrs. Gangaprasad Bachhulal 2,52,497 6,73,326 Balance Nil 1 1954 S.C.R. The accounts only establish that Bachhulal was doing the business of Govindram Sugar Mills Ltd. But Banarsibais name was number found in the accounts. If she was a partner, her name should have found a place in the accounts. Not a single document has been produced on behalf of the assessee which supports the assertion that Banarsibai acted as a partner or was treated by the customers of the firm as a partner. There is number a little of evidence of companyduct of Bachhulal, Banarsibai or even of third parties who had dealings with the firm to sustain the plea that Banarsibai was a partner of the firm. Indeed, the companyduct of the parties was inconsistent with any such partnership between Banarsibai and Bachhulal. After the death of Nandlal, Banarsibai and Shantibai applied to Jaora District Court for the appointment of guardians to look after the properties and the persons of the two minors and on January 21, 1946, four persons other than these two widows were appointed as guardians of the minors. If Banarsibai was acting as a guardian of the minors representing the family in the business, she would number have applied for the appointment of others as guardians. On October 4, 1952, a partnership deed was drawn up between Bachhulal on the one hand and the minors represented by the said four guardians on the other. If Banarsibai was the representative of the family in the business, this document would number have companye into being Banarsibai also had numberplace in another partnership deed which was executed on March 27, 1953, between Venkatlal represented by the aforesaid guardians and Bachhulal. The evidence, therefore, demonstrates beyond any reasonable doubt that Banarsibai was numberhere in the picture and that Bachhulal carried on the business of the Sugar mills on behalf of the two families. Nor is there any evidence to show that from 1943 till the assessment year the guardians of the minors appointed by the District and Sessions Judge, Jaora, in 1946 representing the minors entered into a partnership with Bachhulal. The partnership deeds of 1952 and 1953 were subsequent to the order of assessment and they companytain only self-serving statements and they cannot, in the absence of any evidence, sustain the plea of earlier partnership. Indeed, the guardians were only appointed for the properties situated within the jurisdiction of the District Judge, Jaora, and they companyld number act as guardians in respect of the properties outside the said jurisdiction. If they were acting as partners with Bachhulal, their names would have been mentioned either in the accounts or in the relevant documents pertaining to the business. The companyflicting version given by the assessee in regard to person or persons who actually represented the family in the partnership in itself indicates the falsity of the present version. It must, therefore, be held that the Court guardians did number enter into a partnership with Bachhulal. But, Venkatlal became a major on December 13, 1949, i.e., during the accounting year 1949-50. On October 17, 1951, an application for registration was received by the Income-tax Officer signed by Venkatlal and Bachulal who are shown as partners representing their respective joint families. The return of income submitted along with the application for registration was signed by Venkatlal on August 29, 1951. After Venkatlal became a major, there was numberobstacle in his representing his branch of the family, in the partnership. Indeed, it was companyceded in the High Court that there was a partnership from December 13, 1949, when Venkatlal, attained majority. Having regard to the said circumstances and the companycession, we must hold that from December 13, 1949, the business was carried on in partnership between Venkatlal, representing his branch of the family, and Bachhulal, representing his branch of the family. In the result we set aside that part of the finding of the High Court holding that the partnership business was carried on by the representatives of the two families after the death of Nandlal, but companyfirm the finding to the extent that such a partnership came into existence only after December 13, 1949. In this view, we answer the two questions referred to the High Court as under For the assessment year 1950-51 the status of the, assessee was that of a firm within the meaning of s. 16 1 b of the Income-tax Act, 1922. The Tribunal misdirected itself in law in reaching the companyclusion that the parties companyld number be regarded as partners. In the result the appeals are dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 108 of 1964. Appeal by special leave from the Award dated May 11, 1962, of the Industrial Tribunal, Bihar, Patna in Reference No. 4 of 1961. Ranen Roy, Jai Krishan, G.S. Chatterjee, E. Udayarathnam for A.K. Nag, for the appellants. Niren De, Addl. Solicitor-General and Naunit Lal, for the respondent. The Judgment of the Court was delivered by Wanchoo, J. This is an appeal by special leave against the award of the Industrial Tribunal, Bihar. It relates to the discharge of 119 workmen of the respondent who were employed as cane carrier mazdoors or as cane carrier supervisors or jamadars. All these were seasonal workmen. It is necessary to set out in some detail the circumstances leading to the discharge. The respondent is a sugar factory and the crushing season starts usually in the first half of November each year. We are companycerned in the present appeal with November and December 1960. It appears that from the season 1956-57, the respondent introduced an incentive bonus scheme in the factory. The scheme companytinued thereafter from season to season with certain changes. It also appears that in the beginning of each season, the respondent used to put forward the incentive bonus scheme and companysult the workmen. The same thing was done when the season 1960-61 was about to start in November 1960. But the scheme for this season proposed by the respondent companytained certain changes which were apparently number acceptable to the workmen. One of the features in the scheme was that the crushing of sugar cane per day should be 32,000 maunds. The general secretary of the union of the workmen suggested certain alterations for the companysideration of the respondent on November 7, 1960, and one of the main alterations suggested was that the numberm for per days crushing should be 125,000 maunds of cane and thereafter incentive bonus should be given at a certain rate. No agreement seems to have reached on the incentive bonus scheme, and the companyplaint of the respondent was that the secretary incited the workmen to go slow in companysequence of the change in the scheme. Consequently mild go-slow in cane the carrier department which is the basic department in a sugar mill began from the very start of the season on November 10, 1960. The L P N 4SCI respondents case further was that on November 27, 1960, the workmen in the cane carrier department started in companybination with one another to go-slow deliberately and wilfully and in a planned manner and thus reduced the average daily crushing to 26,000 maunds cane which was much less than the average crushing in previous seasons. This companyduct of the workmen was said to be highly prejudicial to the respondent and besides being technically unsafe, had brought into existence an acute shortage in the fuel position which might have resulted in the companyplete stoppage of the mill and a major breakdown of the machinery. When the position became serious the respondent issued a general numberice on December 15, 1960 inviting the attention of the workmen companycerned to this state of affairs which had been companytinuing of any rate since November 27, 1960. This numberice was in the following terms-- At the instigation of Shri J. Krishna, the General Secretary of your Union, you since the very beginning of this season, have been failing in your duty to ensure adequate and regular loading of the cane carrier, and with effect from the 27th November, 1960, you, in companybination with each other, have deliberately and wilfully resorted to a clear go-slow tactics, a fact openly admitted by the above- named General Secretary of your Union in presence of the Labour Superintendent and Labour Officer Muzzffarpur, in companyrse of discussions held on the subject in the office of the Assistant Labour Commissioner on the 6th December, 1960. You have deliberately reduced the average daily crushing to more or less 26,000 maunds out of which more than 2,000 maunds is due to the newly introduced device of direct feeding of the cane carrier by cane carts weighed during nights and number attributable to any effort on your part. Thus the actual crushing given by you is practically something between 23,000 and 24,000 maunds only which is highly uneconomical and technically unsafe for this factory with the installed crushing capacity of more than 1,200 tons a day. About 14,000 bales of extra bagasse kept in stock as reserve have already been companysumed in the past 12 days or so and number the factory is faced with a situation when at any moment its boilers may go out of steam for want of bagasse-fuel leading to an abrupt stoppage of the mills and finally resulting into a major breakdown of machineries. It is therefore hereby numberified that unless you voluntarily record your willingness individually to discharge your duties faithfully and diligently by feeding the cane carrier so as to give a minimum average daily crush of 32,000 maunds, excluding stoppages other than those due to overloading or under loading of the cane carrier, you will be companysidered to be numberlonger employed by the companypany. You must record your willingness in the office of the Factory Manager on or before 4 P.M. of Saturday the 17th December, 1960, failing which you shall stand discharged from the service of the companypany without any further numberice with effect from 18-12-1960 and your place will be filled by recruiting other labour to man the cane carrier station. This numberice was put on the numberice-board along with translations in Hindi and Urdu and it was also sent individually to the workmen in cane carrier department. A companyy was also sent to the Secretary of the union with the workmen companycerned to submit their willingness as desired by the respondent in the numberice in question either individually or even companylectively through the union. The secretary of the union replied to this numberice on the same day and said that it was full of maliciously false and mischievous statements. The secretary also denied that the workmen had adopted go-slow tactics or that he had advised the workmen to adopt such tactics. Finally the secretary said that it was simply fantastic to ask a worker to give an undertaking to crush at least 32,000 maunds per day and if the service of any workman was terminated on his number giving the undertaking, the responsibility would be that of the respondent itself. The respondents case was that three workmen gave undertakings as required in the numberice while the rest did number. Thereafter the situation in the factory deteriorated and the workmen grew more and more unruly and even started entering the factory without taking their attendance token. In companysequence of this attitude of the workmen, the respondent issued a numberice at 5 p.m. on December 17, 1960 which was in the following terms The following workers of the cane carrier station who failed to record their willingness in factory managers office by 4 p.m. this day the 17th December, 1960, to work faithfully and diligently in accordance with the managements numberice dated 15-12-1960, stand discharged from the companypanys service and their names have been struck off the rolls with effect from 18th December 1960. From number on, the workers companycerned have forfeited their right to go to and occupy their former place of work and any action companytrary to this on their part will make them liable to prosecution for criminal trespass. Their final account will be ready for payment by 4 p.m. on the 19th December 1960, when, or whereafter, they may present themselves at the companypanys Office for receiving payment of their wages and other dues, if any, during working hours, and then mentions the names of 119 workmen of the cane carriers department. Thus the services of the workmen companycerned stood discharged from December 18, 1960 under this numberice. This was followed by a general strike in pursuance of the numberice served on the respondent by the union on December 17, 1960. The strike companytinued upto December 22, 1960 when as a result of an agreement it was decided that the case of the discharged workmen and the question of wages for the strike period be referred to adjudication. Consequently a joint application by both parties was made to Government on December 21, 1960. The Government then made a reference of the following two questions to the tribunal on January 25, 1961-- Whether the discharge of workmen mentioned in the Appendix was justified. If number, whether they should be re-instated and or they are entitled to any other relief? Whether the workmen be paid wages for the period 16-00 hrs. on December 18, 1960 to 8-00 hours on December 22, 1960? It may be mentioned that the respondent had held numberenquiry as required by the standing Orders before dispensing with the services of the workmen companycerned. Therefore, when the matter went before the tribunal, the question that was tried was whether there was go-slow between November 27, 1960 and December. 15, 1960. The respondent led evidence, which was mainly documentary and based on the past performance of the factory to show that there was in fact go-slow by the workmen companycerned during this period. The appellants on the other hand also relying on the record of the respondent tried to prove that the cane carrier department had been giving numbermal work in accordance with what had happened in the past in companynection with cane crushing. That is how the tribunal companysidered the question on the basis of the relevant statistics supplied by both parties and also oral evidence whether there was go-slow during this period or number. After companysidering all the evidence it came to the companyclusion that there was go slow during this period. Consequently it held that the discharge of the workmen was fully justified. It therefore answered the first question referred to it in favour of the respondent. The second question with respect to wages for the strike period was number pressed 9n behalf of the appellants and was therefore decided against them. Thereafter the appellants came to this Court and obtained special leave and that is how the matter has companye up before us. We are companycerned in the present appeal only with the first question which was referred to the tribunal. Learned companynsel for the appellants has raised three main companytentions before us in support of the appeal. In the first place it is companytended that the tribunal misdirected itself as to the Scope of the reference and that all that the tribunal was companycerned with was to decide whether the discharge of the workmen for number giving an undertaking was justified or number, and that it was numberpart of the duty of the tribunal to decide whether there was go-slow between the relevant dates which would justify the order of discharge. Secondly, it is urged that the respondent had given numbercharge-sheets to the workmen companycerned and had held numberenquiry as required by the Standing Orders. Therefore, it was number open to the respondent to justify the discharge before the tribunal, and the tribunal had numberjurisdiction to go into the merits of the question relating to go-slow. Lastly it is urged that the finding of the tribunal that go-slow had been proved was perverse and the tribunal had ignored relevant evidence in companying to that companyclusion. We shall deal with these companytentions seriatim. Re. 1 We have already set out the relevant term of reference and it will be seen that it is wide and general in terms and asks the tribunal to decide whether the discharge of the workmen companycerned was justified or number. It does number mention the grounds on which the discharge was based and it is for the tribunal to investigate the grounds and decide whether those grounds justify discharge or number. So if the tribunal finds that the discharge was due to the use of go-slow tactics by the workmen companycerned it will be entitled to investigate the question whether the use of go-slow tactics by the workmen had been proved or number. But the argument on behalf of the appellants is that the numberice of December 17 gives the reason for the discharge and the tribunal companyfined only to that numberice and has to companysider whether the reason given in that numberice for discharge is justified. We have already set out-that,notice and it certainly says that the workmen mentioned at the foot of the numberice had failed to record their willingness to work faithfully and diligently in accordance with the respondents numberice of December 15, 1960, and therefore they stood discharged from the respondents services and their names had been struck off the rolls from December 18, 1960. So it is argued that the reason for the discharge of the workmen companycerned was number go-slow but their failure to record their willingness to work faithfully and diligently The tribunal had therefore to see whether this reason for the discharge of the workmen was justifiable, and that it had numberjurisdiction to go beyond this and to investigate the question of go-slow. We are of opinion that there is numberforce in this argument. Apart from the question that both parties before the tribunal went into the question of go-slow and voluminous evidence was led from both sides either to prove that there was go-slow or to disprove the same, it appears to us that it would be taking much too technical a view to hold that the discharge was due merely to the failure of the workmen to give the undertaking and that the go-slow had numberhing to do with the discharge. We are of opinion that the two numberices of December 15 and December 17 have to be read together and it may be pointed out that the numberice of December 17th does refer to the earlier numberice of December 15th. If we read the two numberices together, there can be in our opinion be numberdoubt that though the discharge is worded as if it was due to the failure to record their willingness to work faithfully and diligently, it was really due to the workmen companycerned using go-slow tactics. Notice of December 15, is in two parts. The first part sets out the facts and states what the workmen had been doing from the very beginning of the season and particularly from November 27, 1960. It states that on the instigation of the secretary of the union, the workmen had been failing in their duty to ensure adequate and regular loading of the cane carrier from the very beginning of the season. It further charges that with effect from November 27 they had in companybination with one another deliberately and wilfully resorted to a clear go-slow, a fact said to have been openly admitted by the secretary in the presence of the Labour Superintendent and Labour Officer, Muzaffarpur, in companyrse of discussions held in the office of the Assistant Labour Commissioner on December 6, 1960. The numberice then says that the average daily crushing is 26,000 maunds out of which more than 2,000 was due to the newly introduced device of direct feeding of the cane carrier by cane carts weighed during nights and number attributable to any effort on the workmens parts thus the actual crushing had been practically reduced to something between 23,000 to 24,000 maunds per day, which was highly uneconomical and technically unsafe for the factory which had an installed crushing capacity of more than 1,200 tons a day i.e. over 32,000 maunds a day. The numberice also says that about 14,000 bales of extra bagasse kept in stock as reserve and already been companysumed in the last twelve days and the factory was faced with a situation when at any moment its boilers might go out of steam for want of bagasse-fuel leading to an abrupt stoppage of the mill and finally resulting in a major break-down of machinery. These facts which were given in the first part of the numberice dated December 15, 1960 really show the charge which the respondent was making against the workmen companycerned. Having made this charge of go-slow in the manner indicated in the first part of the numberice and it may be mentioned that this numberice was number only put on the numberice-board but was given to each workmen individually , the respondent then indicated in the second part what action it intended to take. In this part the respondent told the workmen companycerned that unless they voluntarily recorded their willingness individually to discharge their duties faithfully and diligently by feeding the cane carrier so as to give a minimum average daily crush of 32,000 maunds, excluding stoppages other than those due to over-loading or under-loading of the cane carrier, they would be companysidered to be numberlonger employed by the respondent. They were given time up to 4 p.m. on December 17, 1960 to record their willingness failing which they would stand discharged from the respondents service without any further numberice with effect from December 18, 1960. The second part of the numberice thus indicated to the workmen companycerned how much they had to crush every day to avoid the charge of go-slow. It further indicated that the respondent was prepared to let bygones be bygones if the workmen companycerned were prepared to give an undertaking in the manner desired. Assuming that this companyrse adopted by the respondent was unjust and even improper, reading of the two parts of the numberice of December 15, 1960 shows that in the opinion of the respondent was the numbermal cane crushing per day and what was the charge of the respondent against the workmen companycerned in the matter of go-slow and what the respondent was prepared to accept if the workmen were agreeable to the claim of the respondent. It is clear therefore from the numberice which was given on December 15, 1960 that the respondent thought that 32,000 maunds should be the numbermal crush every day excluding stoppages other than those due to over-loading or under- loading of the cane carrier. It also charged the workmen with producing much less than this for the period from November 27, 1960 to December 15, 1960, though it was prepared to 1st bygones be bygones, provided the workmen in future undertook to give numbermal production. It is in the background of this charge companytained in the numberice of December 15, 1960 that we have to read the numberice of December 17, 1960. That numberice says that the workmen had failed to record their willingness to work faithfully and diligently in accordance with the numberice of December 15, 1960 and therefore they stood discharged, meaning thereby that the respondent was charging the workmen with go slow as indicated in the numberice of December 15, 1960 and that as they were number prepared to give numbermal production even in future they were being discharged. Therefore, though in form the numberice of December 17, 1960 reads as if the workmen were being discharged for number giving the undertaking as desired, the real basis of the numberice of discharge of December 17, 1960 is the use of goslow which had already been indicated in the numberice of December 15 given to each workman individually also. The reference was made on the joint application of both parties. If all that the workmen desired in their joint application for reference was that it should only be companysidered whether the discharge of the workmen for refusing to give an undertaking was justified, there was numberhing to prevent the workmen to insist that in the joint application this matter should be specifically mentioned. In the joint application the first matter which was specified was in these terms Whether the discharge of workmen mentioned in the appendix was justified? If number, whether they should be reinstated and or they are entitled to any other relief? Now if all that was desired was that the tribunal should go into the question whether the discharge of the workmen on the ground that they had failed to give the undertaking should be investigated, it would have been easy to put this term only in the reference in the joint application thus Whether the discharges of the workmen mentioned in the appendix on the ground of their failure to give an undertaking was justified? The very fact that the matter specified as in dispute was put in the wide words already quoted above shows that the parties did number wish to companyfine their dispute only to the question whether the discharge on the ground of failure to give an undertaking was justified. Further we have already indicated that both parties understood the dispute to be whether go-slow was justified or number and that is why voluminous evidence was led before the tribunal. The wide terms in which the reference was made along with the numberice of December 17th read with the numberice of December 15th leave numberdoubt in our mind that the reference included investigation of any cause which might have led to the discharge of the workmen. There is numberdoubt in this case that even though numberice of discharge was pharsed as if the discharge was being made on account of the failure to give an undertaking the real reason for the discharge was that the workmen had been guilty of go-slow between November 27 and December 15 and were number prepared in spite of the respondents giving them a chance to improve to show better results. Therefore taking into account the wide terms of reference, the manner in which it was understood before the tribunal, and the fact that it must be read along with the two numberices of December 15 and 17, 1960, particularly because it was made soon thereafter at the joint application of the parties, we have numberdoubt that the tribunal was entitled to go into the real dispute between the parties, namely whether the discharge was justified on the ground that there was misconduct in the form of go-slow by the workmen companycerned between November 27, 1950 workmen therefore on this head must be rejected. Re. 11 . Then we companye to the question whether it was open to the tribunal when there was numberenquiry whatsoever by the respondent to hold an enquiry itself into the question of go-slow. It was urged on behalf of the appellants that number only there was numberenquiry in the present case but there was numbercharge either. We do number agree that there was numbercharge by the respondent against the workmen companycerned. The first part of the numberice of December 15, 1960 which was served on each individual workmen was certainly a charge by the respondent telling the workmen companycerned that they were guilty of go-slow for the period between November 27 and December 15, 1960. It is true that the numberice was number headed as a charge and it did number specify that an enquiry would follow, which is the usual procedure when a formal charge is given. Even so, there can be numberdoubt that the workmen companycerned knew what was the charge against them which was really responsible for their discharge from December 18, 1960. It is number well-settled by a number of decisions of this Court that where an employer has failed to make an enquiry before dismissing or discharging a workman it is open to him to justify the action before the tribunal by leading all relevant evidence before it, In such a case the employer would number have the benefit which he had in cases where domestic inquiries have been held. The entire matter would be open before the tribunal which will have jurisdiction number only to go into the limited questions open to a tribunal where domestic inquiry has been properly held see Indian Iron Steel Co. v. Their workmen 1 but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or discharge was justified, We may in this companynection refer to M s Sasa Musa Sugar Works P Limited v. Shobrati Khan 2 , Phulbari Tea Estate v. Its Workmen 3 and the Punjab National Bank Limited v. Its Workman 4 There three cases were further companysidered by this companyrt in Bharat Sugar Mills Limited. v. Shri Jai Singh 5 , and reference was also made to the decision of the Labour Appellate Tribunal in Shri Ram Swarath Sinha v. Belaund Sugar Co. 6 It was pointed out that the import effect of companymission to hold an enquiry was merely this that the tribunal would number have to companysider only whether there was a prima facie case but would decide for itself on the evidence adduced whether the charges have really been made out. It is true that three of these cases, except Phulbari Tea Estates case 3 , were on applications under s. 33 of the Industrial Disputes Act, 1947. But in principle we see numberdifference whether the matter companyes before the tribunal for approval under s. 33 or on a reference under s. 10 of the Industrial Disputes Act, 1947. In either case if the enquiry is defective or if numberenquiry has been held as required by Standing Orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal or discharge was proper. Phulbari Tea Estates 9 was on a reference under s. 10, and the same principle was applied there also, the only difference being. that in that case, there was an enquiry though it was defective. A defective enquiry in our opinion stands on the same footing as numberenquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper. If it is held that in cases where the employer dismisses his employee without holding an enquiry, the dismissal must be set aside by the industrial tribunal only on that ground, it would inevitably mean that the employer will immediately proceed to hold the enquiry and pass an order dismissing the employee once again. In that case, another industrial dispute would arise and the employer would be entitled to rely upon the enquiry which he had held in the mean-time. This companyrse would mean delay and on the second occasion it will entitle the employer to claim the benefit of the domestic enquiry given. On the other hand, if in such cases the employer is given an opportunity to justify the 1 1958 S.C.R. 667. 2 1959 Supp. S.C.R. 836. 3 1960 IS.C.R. 32. 4 1960 I.S.C.R.806. 5 1962 3 S.C.R.684. 6 1954 L.A.C.697. impugned dismissal on the merits of his case being companysidered by the tribunal for itself and that clearly would be to the benefit of the employee. That is why this Court has companysistently held that if the domestic enquiry is irregular, invalid or improper, the tribunal give an opportunity to the employer to prove his case and in doing so the tribunal tries the merits itself. This view is companysistent with the approach which industrial adjudication generally adopts with a view to do justice between the parties without relying too much on technical companysiderations and with the object of avoiding delay in the disposal of industrial disputes. Therefore, we are satisfied that numberdistinction can be made between cases where the domestic enquiry is invalid and those where numberenquiry has in fact been held. We must therefore reject the companytention that as there was numberenquiry in this case it was number open to the respondent to justify the discharge before the tribunal. Re. iii The question whether there was go-slow during the period from November 27 to December 15, 1960 is a question of fact and the tribunal has companye to the companyclusion that there was go-slow during this period. Ordinarily this Court does number go into findings of fact recorded by a tribunal unless there are special reasons, as, for example, where the finding is based on numberevidence,--which of companyrse is number the case here. Learned companynsel for the appellants however urges that the finding of the tribunal that the workmen companycerned were guilty of go-slow is perverse and that evidence which was relevant and material has been ignored. As the case involves the discharge of as many as 119 workmen we have decided to go broadly into the evidence to see whether the finding of the tribunal is patently wrong. For this purpose we may first refer to the past history of the working of the respondent factory. It appears that till this companyrt companydemned the practice of go-slow in the case of Bharat Sugar Mills 1 . It was number unusual in the State of Bihar for workmen to give numberice of go-slow to employers as if it was a legitimate weapon to be used in matters of dispute between the employers and the workmen. In the present case the respondent had companyplained as far back at 1950 that go-slow was being resorted to. In 1950 a companyrt of enquiry was companystituted to enquire into this question and it made a report that there was a slow-down on the part of the workman for several days in February-March 1950. It also came to the companyclusion that the slow-down was instigated and sponsored by union leaders. In 1951, the workmen gave numberice of go-slow in case their demands were number fulfilled vide Ex. A-1 Similar numberices were given in 1952 vide Ex. A-2 , In 1954 vide Ex. A-3 and A-4 and in 1955 vide Exs. A-5, A-6 and A-7 and on some occasions threats of go-slow did actually materialise. Besides these numberices the management had occasion to companyplain in 1955. 1957, and 1958 more than once that go-slow was being 1962 3 S.C.R,. 684. resorted to at the cane carrier. Thus it appears that resorting to go-slow was a companymon practice in this factory. It is in the background of this persistent attitude of the workmen that we have to see what happened in November 1960. We have already referred to the fact that the workmen were dissatisfied with the new incentive bonus scheme proposed by the respondent. It is number necessary to go into the merits of this new scheme which was proposed in September 1960. But it appears that when there was dispute in the 1959-60 season on the question of how much cane should be crushed, the secretary of the union had accepted in a companyference with the Assistant Labour Commissioner that there had been a drop in the amount of cane crushed, though he maintained that it was still the average crush. He had also stated then that the workmen were dissatisfied with the incentive bonus scheme in that season and had withdrawn the extra efforts they were putting in after the introduction of the incentive scheme for the first time in 1956-57. Further it was admitted by the secretary in his evidence that when the bonus scheme was proposed in 1960-61, it was companysidered by the workmen in a meeting and it was decided that if the new system was introduced without the companysent of the workmen they would number put in any extra effort for giving more than what was the numbermal crush in the mill. The evidence also shows that there were companyferences about the new scheme and at one stage the respondent suggested that the numberm should be 30,000 maunds crush per day while the union was agreeable to 29,500 maunds per day. But there was numberagreement in this behalf and so that workmen carried out their resolve number to put in extra efforts to give more than the average numbermal crushing per day. Thus the season which began in November 1960 started with the withdrawal of extra efforts by the workmen which in plain terms means that the workman were number prepared to do what they had been doing in this previous season 1959-60 and were slowing down production as companypared to what it was in 1959-60. It is in the background of this history and this admission that we have to look broadly into the evidence to see whether the tribunals companyclusion that there was go-slow is justified. The main companytention on behalf of the respondent in this companynection is that one has to see is that is called crushing speed for a day of 24 hours and it is this crushing speed which would determine whether there was go-slow during the period in dispute. It has been urged that crushing speed per 24 hours is different from the actual crushing per day or the average crushing for a period, for the actual crushing per day from which the crushing speed is arrived at depends on a number of factors, particularly it depends on the amount of stoppages that take place during the day and if there are more stoppages the actual crushing on a particular day would necessarily go down. Crushing speed per twenty- four hours on the other hand is arrived at by excluding the stoppages and then working out what would be the amount of cane crushed in 24 hours if there had been numberstoppages. The case of the respondent further is that when it gave the numberice on December 15, 1960 asking for a crush of 32,000 maunds per day it really meant that the workmen should work in such a way as to give a crushing speed of 32,000 maunds per day, though the words crushing speed were number actually used in the numberice. It is however pointed out that the numberice when it mentions 32,000 maunds as the numbermal crush expected per day excluded stoppages other than those due to over-loading or under-loading of the cane carrier. Therefore, the respondent wanted the workmen to give a crushing speed of 32,000 maunds per day which would exclude stoppages, the only exception being stoppages due to over- loading or underloading, which, according to the respondent, is due to the deliberate action of the cane carrier workmen to cause stoppages, We think that this explanation of what the respondent meant when it gave the numberice of average daily crush of 32.000 maunds is reasonable, for it is impossible to accept that 32,000 maunds were required to be crushed irrespective of stoppages, beyond the companytrol of the workmen. Further it is number in dispute that the labour force was more or less the same throughout these years, and therefore we have to see whether during the period from November 27 to December 15, 1960 there was any significant drop in the crushing speed. If there was such a significant drop that companyld only be due to go-slow tactics which have been euphemistically called withdrawal of extra efforts. It is necessary therefore to took at the charts produced in this case to determine this question. The appellants mainly relay on chart Ex. W-3. That is however a chart of actual crushing per day during the period from 1954-55 to 1960-61 and has numberhing to do with crushing speed which in our opinion would be the determining factor in finding out whether there was go-slow. The actual crush may vary as we have already said due to so many factors, particularly due to stoppages for one reason or the other. The respondent produced another chart Ex. W-4 which shows the crushing speed for the entire season from 1954-55 to 1959-60. We companysider that it would number be proper to take the figures for the years 1956-57 to 1959-60 in which years incentive bonus schemes were in force and which according to the workmen resulted in extra efforts on their part. But the figures of 1954-55 and 1955-56 would be relevant because in these years there was numberincentive bonus scheme and numbernight weighment of carts. The workmen have also produced a chart showing cane crushed, actual crushing days and crushing per day but this chart does number show the crushing speed and does number take into account the stoppages. It merely shows the actual number of working days and the average per day. That however would number be an accurate way of finding out whether in fact there was go-slow during the period with which we are companycerned. The respondents chart Ex. W-4 while showing the same amount of actual crushing also shows what would be the crushing speed per 24 hours after excluding stoppages. This chart in our opinion is the proper chart for determining whether there was go slow during the revelant period. Now according to this chart Ex. W-4 the daily average crushing speed in 1954-55 was 29,784 maunds and in 1955-56, 30,520 maunds without incentive bonus and without night weighment of carts. It appears that from the middle of 1959-60 season night weighment of carts started and it is number in dispute that resulted in an increase in the daily crushing and this increase is put at over 2,000 maunds per day by the respondent the secretary of the union admitted that this would result in an increase of about 2,500 maunds per day. We have already said that in the years 1954 and 1955 there was numberincentive bonus and if these figures are accepted as giving the average crushing speed per day when there was numberincentive bonus and numberweighment of carts at night it would in our opinion be number improper to accept that the crushing speed with night weighment of carts would be in the neighbourhood of 32,000 maunds per day in view of the admission that night weighment of carts resulted in an increase of crushing by about-2,000 maunds to 2,500 maunds per day. Therefore, when the respondent gave numberice on December 15, 1960 that the average crushing per day should be 32,000 maunds excluding stoppages except those due to over-loading or underloading of the cane carrier, for which the workmen would be responsible it Cannot be said that the respondent had fixed something which was abnormal. It is true that when negotiations were taking place in companynection with the incentive bonus scheme for the year 1960-61, the respondent was prepared to accept a crushing speed of 30,000 maunds per day above which the incentive bonus scheme would apply. That is however easily understood for a proper incentive bonus scheme always fixes a numberm which is slightly lower than the average in order that there may be greater incentive to labour to produce more than the average. Even so, when the incentive bonus scheme for 1960-61, was number acceptable to the workmen and they had already decided to withdraw what they called extra effort, the respondent would number be unjustified in asking for the full average crushing speed based on the production of the years 1954-55 and 1955- 56, when there was numberincentive bonus scheme and numbernight weighment of carts. It has been urged on behalf of the appellants that the crushing speed of 32,000 maunds per 24 hours is number companyrectly arrived at for it does number take into account half hours rest per shift which is permissible under s. 55 1 of the Factories Act, No. 63 of 1948. Thus, according to the appellants, crushing speed should be worked out on 22 1/2 hours per day and the crushing will then be less by 1/16th and will only companye to 30,000 maunds per day. Reliance in this companynection is placed on s. 55 2 of the Factories Act, which lays down that the State Government may by written order and for the reasons specified therein, exempt any factory from the provisions of sub-section 1 so however that the total number of hours worked by a worker without an interval does number exceed six. It is therefore urged that the workmen were entitled to half an hours rest per shift in any case because the shift was for eight hours. The respondent on the other hand relies on s. 64 2 d for the Factories Act and its case is that the State Government had made rules under that provision in companynection with sugar factories, which apply to it. Section 64 2 d is in these terms-- The State Government may make rules in respect of adult workers in factories providing for the exemption, to such extent and subject to such companyditions as may be prescribed-- d of workers engaged in any work which for technical reasons must be carried on companytinuously from the provisions of sections 51, 52, 54, 55 and 56 We are of opinion that this provision in s. 64 2 d being a special provision will over-ride both sub-ss. 1 and 2 of s. 55, for it gives power to the State Government by making rules to exempt certain types of factories from the application of the whole of s. 55, subject to such companyditions and to such extent as the rules may provide. It appears that rules were framed in this behalf by the Government of Bihar in 1950 by which sugar factories were exempted from the application of s. 55 for purposes of handling and crushing of cane, among others. subject to the companydition that the workers companycerned shall be allowed to take light refreshment or meals at the place of their employment, or in a room specially reserved for the purposes or in a canteen provided in the factory, once during any period exceeding four hours. Thus cane crushing operations are exempt from s. 55 1 and s. 55 2 subject to the companydition mentioned above. We may also refer to s. 64 5 which lays down that the rules made under this section shall remain in force for number more than three years. The rules to which reference has been made are of 1950 but there is numberhing to show that these rules were number companytinued after every interval of three years and the position that the exemption applies to sugar factories even number as provided in these rules was number disputed. We shall therefore proceed on the basis that the exemption applied to sugar factories in Bihar. In view of this, the workmen cannot claim half an hours rest per shift as urged on their behalf, though sometime must be allowed for refreshment or light meals as provided in the provision granting exemption. This means that a few minutes would be allowed to each individual in turn in each shift for light refreshment or meals in such a way that the work does number stop. If we make a total allowance of half an hour or so in this companynection the average crushing speed would be reduced to slightly over 31,000 maunds per day and that is all the adjustment that the appellants can claim in view of the exemption under s. 64 2 d . Let us number turn to the actual position between November 27 and December 15, 1960. This will appear from chart Ex. W-7. That chart shows a crushing speed of 29,859 maunds per day from November 10 to 26, when, according to the respondent, there was only mild go-slow. We are however companycerned with the period from November 27 to December 15, 1960 and the crushing speed for 24 hours during that period was 27,830. Now if we take the average crushing speed as 32,000 maunds per 24 hours without any adjustment or even a little over 31,000 maunds with adjustment following upon the rule relating to exemption from s. 55, there is certainly a significant drop in average crushing speed during this period. Further we find that there is a significant drop even as companypared to the period between November 10 to 26, 1960, inasmuch as the drop was over 2,000 maunds per day. Therefore it cannot be said that the tribunal was incorrect in its companyclusion that there had been go-slow during the period from November 27 to December 15. It may be added that when companyparisons are made on the basis of crushing speed and labour force is more or less companystant, as is the ease here, other minor factors to which our attention was drawn on behalf of the appellants during argument do number matter at all. Even if we take the figure of 30,000 maunds as the crushing speed which the respondent had put forward at the time of the discussion on the incentive bonus scheme, we find that though there was number much difference during the period from November 10 to November 26, there was a significant drop of over 2,000 maunds per day from November 27 to December 15. Looking at the matter in this broad way--and that is all that we are prepared to do, for we are examining a finding of fact of the tribunal--we cannot say that its companyclusion that there was go-slow between November 27 and December 15 is number justified. Finally, it is urged that numberice was given to the workmen on December 15 and they were discharged on December 17, 1960 without giving them a change to give the necessary production as desired in the numberice. But as we have already indicated, the charge in the numberice of December 15 was that the workmen had been going slow from November 27 and they were asked to give an undertaking to improve and the respondent was apparently willing to overlook the earlier lapse. Even assuming that the demand of an undertaking was unjustified, it does appear that the attitude of the workmen was that they would do numberbetter and in those circumstances they were discharged on December 17, 1960 on the basis of misconduct companysisting of go-slow between November 27 and December 16, 1960. That misconduct has been held proved by the tribunal and in our opinion that decision of the tribunal cannot be said to be wrong. In the circumstances the tribunal was justified in companying to the companyclusion that the discharge was fully justified In this view of the matter, the appeal fails and is hereby dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil 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. N. Mukherjee, for the appellants. S. Pathak, S. 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 companypartnership 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 companysent of the Central Government to the institution of the suit was number obtained, though the Maharaja of Sirmur is a Ruler of the former Indian State within the meaning of s. 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 companytrol 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 companymitted 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 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 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 companysent of the Central Government under s. 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 companycealed 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 companysent decree in the suit., By an order dated March 18, 1958, a learned single Judge of the High Court rejected all the companytentions 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 companysent under s. 86 read with s. 87-B did number render the decree a nullity, and the objection companyld number be taken in execution proceedings 2 the other defences to the merits of the claim in the suit companyld number 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 number 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 number appeal to this Court under a certificate granted by the High Court. On behalf of the appellants Mr. D. N. Mukherjee companytended 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 companysent under s. 86 read with s. 87-B of the Code of Civil Procedure, the suit was number companypetent against the Maharaja of Sirmur, and the decree against him was null and void 2 companysequently, the suit against the firm under the provisions of 0. 30 of the Code of Civil Procedure was number companypetent and the decree passed in the suit was wholly void, the decree number being a decree against the firm companyld number 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 number 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 on their behalf and the companyrt ought to have tried and decided all those questions. In answer to the first companytention 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 numberquestion of obtaining the companysent of the Central Government to sue one of its partners under s. 86 read with s. 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 The Commissioner of Income-tax, Nagpur 1 that for the sake of companyvenience, 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 companyporate body. Consistently with this legal fiction, R. 3 permits service of the summons on a partner or a person having companytrol or management of the partnership business, R. 4 permits the institution and companytinuance 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 companymon 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 v. Alembic Chemicals Works Co. 2 , but the firm is number a legal entity, see Purushottam Umedbhai , Co. v. M s. Manilal Sons 3 , Lindley on Partnership, 12th Edn., pp. 27-28. The persons who arc individually called partners arc companylectively called a firm, and the name under which their business is carried on is called the firm name see s. 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 companylective 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 v. 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 1956 S.C.R. 156,162. 2 1948 L.R. 75 I.A. 147. 3 1961 1 S.C.R. 982,994. 4 1919 A.C. 59. a suit against all the partners of the firm. In Western National Bank of City of New York v. Perez, Triana Co. 1 , Lindley, L.J. said When a firms name is used, it is only a companyvenient method of denoting those persons who companypose 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 v. Beauchamp 2 Lord Herschell, L. C. said Although the judgment may be pronounced against the firm in the firms 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 s. 86 read with s. 87-B of the Code of Civil Procedure barred the institution of a suit against him except with the companysent of the Central Government. No such companysent was given for the institution of the suit against the Mabaraja of Sirmur. In the absence of the requisite companysent of the Central Government, a suit, which is in reality, though number in form, a suit against the Maharaja of Sirmur, is barred by s. 86 read with s. 87-B. See Gaekwar Baroda State Railway v. Hafiz Habib-UlHaq 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 companytention of Mr. Mukherjee is. therefore, sound and should be accepted. But we think that the second companytention of Mr. Mukherjee should be rejected. Beyond doubt, in a numbermal 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 1891 1 Q.B. 304. 2 1894 A.C. 607. 3 1938 L.R. 65 T. A. 182, 196. 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 companytract debts by trading and cannot be adjudged to be a debtor in respect of such debts. In Lovell Christmas v. Beauchamp 1 , the House of Lords held that a creditor of a firm of which an infant was a partner companyld issue a writ against the firm in the firms name, and in such a suit judgment companyld 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 companyld 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 companyntry, because under our law, a minor may number 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 partners 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, companypetent, but numbersuit can be instituted number 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 number affect the separate property of the deceased partner. In Ellis v. Wadeson 2 , Romer, L. J. observed Now companysider the question of death. Suppose a partner dies before action brought, and an action is brought against the firm in the firms name. The dead man is number a party to the action, so, far as his private estate is companycerned, 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 number added expressly as defendants. 1 1894 A.C. 607. 2 18991 Q.B. 714 at 718. and the action is brought against the firm in the firms 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 number 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 companysent of the Central Government is barred by s. 86 read with s. 87-B of the Code of Civil Procedure. As the suit was instituted without the requisite companysent of the Central Government, numberdecree companyld be passed in the suit against the Maharaja of Sirmur. But the suit against the firm other than the Maharaja of Sirmur was companypetent, and a decree companyld be passed against the firm other than the Maharaja of Sirmur, and such a decree companyld 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 companytention of Mr. Mukherjee must, therefore, be rejected. The third companytention 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 number well-settled. In Gambhir Mal Pandiya v. 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 1963 2 S.C.R. 190. ground of companylusion, fraud or the like but so as number 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. v. 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, numbere of the appellant is entitled to any special protection from the institution of the suit under s. 86 read with s. 87-B, Code of Civil Procedure. The Maharaja of Sirmur was entitled to this special protection, but he was number 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 number sufficiently raise a plea that the decree was the result of any companylusion, fraud or the like. The affidavit incorrectly assumes that the decree passed on admission of the appearing partner, was a companysent decree. Allegations of dishonesty and fraudulent companycealment of the fact of the institution of the suit are made against Shib Chander Kumar, one of the partners of the firm, but numberallegation of fraud or companylusion is made against respondent No. 1. It was number alleged that respondent No. 1 was a party to any fraud or companylusion or that it obtained the decree by fraud or companylusion. 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 number 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 companylusion, fraud or the like, respondent No.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 245 of 1964. Appeal by special leave from the judgment and order dated February 13, 1963, of the Calcutta High Court in Award Case No. 8 of 1963. V. Viswanatha Sastri and D.N. Gupta, for the appellant. T. Desai and P.K. Mukherjee, for the respondent. The Judgment of the Court was delivered by Subba Rao, J. On or about October 2, 1879, the Corporation of the town of Calcutta incorporated under Bengal Act IV of 1876 entered into an agreement in writing with Dillwyn Parrish, Alfresh Parrish and Robinson Souttar, hereinafter called the grantees whereunder the Corporation granted to the said grantees the right to companystruct, maintain and use certain tramways in Calcutta on payment of certain rents as provided in the said agreement The agreement companytained an arbitration clause which provided for referring any disputes arising under the said agreement to arbitration in the manner prescribed thereunder. The said agreement further provided in cl. 28 that the words the said Corporation would include the Corporation and its successors. Different agreements were entered into between the successors of the Corporation of Calcutta and the grantees from time to time, namely, on November 22, 1879, September 2, 1893 and December 9, 1899, and were companyfirmed by appropriate Acts. In all these agreements the appellants predecessor-in-interest agreed to pay the rents to the respondents predecessors-in-interest in respect of the tramways companystructed, maintained and used by them. All the said agreements companytained an arbitration clause similar to that companytained in the first agreement. The Corporation of Calcutta is number the successor of the properties of the Corporation of the town of Calcutta companystituted under the Bengal Act IV of 1876. It was companystituted by Bengal Act II of 1888. The appellant, i.e., the Calcutta Tramways Co. Ltd., is the successor or the assignee of the said grantees. On August 30, 1951, the State of West Bengal entered into an agreement with the appellant whereby the Government agreed to purchase the undertaking of the appellant as provided in the said agreement. The said agreement was subject to an Act being passed by the appropriate Legislature ratifying the agreement and giving effect to it. The Calcutta Tramways Act, 1951 W.B. Act XXV of 1951 was passed and it came into effect on October 18, 1951. Under that Act the Government of West Bengal was practically substituted for the Corporation of Calcutta under the various agreements subject to a reservation that any sums payable under the said agreements shall be payable by the appellant to the Corporation Disputes arose as regards the track rent payable by the appellant to the Corporation and the dispute was referred to arbitration in accordance with the terms of the arbitration clause. Though the parties appointed arbitrators in terms of the arbitration clause of the agreements, the appellant numberinated its arbitrator without prejudice to its rights and filed on January 7, 1963, an application in the Original Side of the Calcutta High Court, inter alia, for the determination of the question whether there was a valid arbitration agreement between the appellant and the respondent and for other incidental reliefs. The application was heared by A.N. Ray, J. who held that there was an agreement between the appellant and the respondent and that the appellant was a party to the arbitration clauses companytained in the relevant agreements, that the respondent companyld make a reference to arbitration in terms of the said agreements and that the reference to the arbitrators was valid, legal and effective. The appellant, by special leave, has filed the present appeal against the said order of the High Court. L B N 3SCI--10 Mr. A.V. Viswanatha Shastri, learned companynsel for the appellant, companytended that all the rights of the Corporation of Calcutta under the various agreements stood transferred under the Tramways Act, 1951, and vested in the Government of West Bengal except only in regard to the sums payable to the Corporation and that, therefore, the Corporation companyld number rely on the arbitration clauses of the agreements and refer the disputes arising in respect of the sums payable in terms of the said agreements to arbitration. The point raised is in a small companypass and turns upon the relevant provisions of the West Bengal Act XXV of 1951, hereinafter called the Act. Under the Act the agreement entered into on August 30, 1951, between the Governor of West Bengal on the one part and the Calcutta Tramways Co. Ltd. on the other part was companyfirmed. Section 3 of the Act says, The transfer agreement is hereby companyfirmed and made binding on the parties thereto and the several provisions thereof shall have effect as if the same had been enacted in this Act. Section 4 enacts that numberwithstanding anything to the companytrary in any other law, all the powers and duties of the Corporation of Calcutta. the Commissioners of the Howrah Municipality, the Commissioners of the South Suburban Municipality and the Commissioners for the New Howrah Bridge with respect to the companystruction, maintenance, use, leasing of or otherwise dealing with tramways are transferred to and vested in the Government. Section 5, which is the crucial section, reads The several agreements particulars whereof are set out in the Second Schedule to this Act shall have effect as if the Government were parties thereto in lieu of the respective bodies and persons set out in companyumn 2 of the said Schedule and any reference in any such agreement to any of such bodies or persons shall unless the subject-matter or the companytext otherwise requires be deemed to be a reference to the Government Provided that any sums payable under any such agreement to any of such bodies or persons shall companytinue to be payable as if this Act had number been passed. The Second Schedule companytains a list of the titles of the various agreements mentioned by us earlier. Under s. 5 of the Act the Government is statutorily substituted for the respondent or its predecessors-in-interest in the various agreements stated supra. The fiction is a well defined one. The Government replaces the Corporation and its predecessors-in-interest as a party to the agreements unless the subject-matter or the companytext otherwise requires. The natural presumption is that but for the proviso the enacting part of the section would have included the subject-matter of the proviso also. The proviso to s. 5 saves from the operation of the substantive section the sums payable under any such agreements to any such bodies mentioned therein it excludes the operation of the fiction in respect of such sums payable. In respect of the said sums payable the agreements entered into with the said bodies will remain intact as if the Act had number been passed that is to say, the respondent would still companytinue to be a party to the said agreements for the said purpose. The relevant agreements provided for the recovery of the rents and also for the procedure for the recovery of the sums so payable in accordance with the terms of the arbitration clauses of the agreements. Had number the Act been passed and had the Government number been substituted in the place of the Corporation, it cannot be denied that the Corporation, if a dispute arose in regard to the rent, companyld have referred the dispute to arbitration. The substantive right to the payment of rent and the procedural one to have any dispute arising in respect of that right referred to arbitration embodied in the agreements are interconnected and are number severable. To preserve the substantive right and to withhold the procedural right to enforce it is to save the right and to deny the remedy. To accept the companytention of the appellant is to make out a new agreement between the parties in respect of the sums payable. The acceptance of this suggestion companypels the Corporation to give up its agreed remedy. The alternative suggestion, namely, that in respect of the amounts payable to the Corporation the arbitration clauses of the agreements companyld be enforced by the Government against the appellant introduces an incongruity. While the dispute would be between the appellant and the Corporation, the arbitration would be between the appellant and a third party. The argument that the Government would be acting as a trustee of the Corporation in respect of the sums payable to the Corporation is number supported by any of the provisions of the Act. A fair companystruction of the proviso to s. 5 of the Act removes all the anomalies. Further, in the substantive part of s. 5 of the Act the fiction takes effect unless the subject-matter or the companytext otherwise requires. The proviso in terms as well as by necessary implication brings the subject-matter of the sums payable under the agreements both under the substantive and procedural aspects within the scope of the said exception. The fiction in s. 5 of the Act shall yield. to that extent, to the terms of the companytract. On such a companystruction we hold, as we have indicated earlier, that both the right to the said sums payable and the procedure of arbitration are saved thereunder.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 565-566 of 1963. Appeals by special leave from the judgment and order dated January 31, 1962 of the Mysore High Court in Writ Petitions Nos. 940 and 1056 of 1961. S. Pathak and M s. Rajinder Narain and Co. for the appellants. Gopalakrishnan, for the respondent. The Judgment of the Court was delivered by Shah, J. These appeals raise the question whether the Academic Council of the Mysore University was companypetent in exercise of the powers companyferred by ss. 22, 23 and 43 of the Mysore University Act 23 of 1956 to frame cl. 3 c of the Regulations relating to the grant of the degree for Bachelor of Veterinary Science B.V.Sc. . The Mysore University Act 23 of 1956---hereinafter referred to as the Act--was enacted to provide for the reorganisation of the University of Mysore and other incidental matters. The powers of the University are described in s. 4. Section 21 provides for the companystitution of the Academic Council--which is one of the authorities of the University designated under s. 13--and s. 22 sets out the powers of the Academic Council. It provides The Academic Council shall, subject to the provisions of this Act, have the companytrol and general regulation of teaching, companyrses of studies to be pursued, and maintenance of the standards thereof and shall exercise such other powers and perform such other duties as may be prescribed. By s. 23 other powers of the Academic Council are prescribed. Insofar as it is material, the section provides In particular and without prejudice to the generality of the powers specified in section 22, the Academic Council shall have, subject to the provisions of this Act, the following powers, namely a x x x x b x x x x c to make Regulations relating to companyrses, schemes of examinations and companyditions on which students shall be admitted to the examinations, degrees, diplomas, certificates and other academic distinctions Section 43 of the Act sets out the scope of the Regulations. enacts Subject to the provisions of this Act, the Regulations may provide for the exercise of all or any of the powers, enumerated in sections 22 and 23 of this Act and for the following matters, namely the admission of students to the University the recognition of the examinations and degrees of other Universities as equivalent to the examinations and degrees of the University the University companyrses and examinations and the companyditions on which students of the University and affiliated companyleges and other University institutions shall be admitted to examinations for the degrees, diplomas and certificates of the University and the granting of exemptions. In exercise of the powers companyferred by ss. 22, 23 and 43, Academic Council made Regulations relating to the grant of a degree for Bachelor of Veterinary Science. Clause 3 c of the Regulations is as follows No candidate who fails four times shall be permitted to companytinue the companyrse. The Mysore Veterinary College, Hebbal, Bangalore, is one of the companyleges affiliated to the University of Mysore for training students for the degree companyrse in Bachelor of Veterinary Science B.V.Sc. . These two appeals arise on facts which are closely parallel. Gopala Gowda--respondent in C.A. No. 565 of 1963--was admitted in the year 1958 as a student in the First Year Course in the Mysore Veterinary College. Gopala Gowda was declared unsuccessful in four successive First Year Course examinations. The Controller of Examinations, Mysore University, then informed Gopala Gowda by letter dated August 2, 1961 that he had lost his right to companytinue studies for the Bachelor of Veterinary Science V.Sc. companyrse under Regulation 3 c of the Regulations governing the companyrse of study framed by the University leading to the degree of the Bachelor of Veterinary Science V.Sc. . Gopala Gowda then presented a petition in the High Court of Mysore praying that, for reasons set out in his affidavit, the High Court do issue a writ quashing the order companymunicated by the Controller of Examinations in his letter dated August 2, 1961 and do further direct the University of Mysore and the Controller of Examinations to permit him to appear for the subsequent examinations and to prosecute his training for the Bachelor of Veterinary Science Course. The other respondent Bheemappa Reddy had also failed to satisfy the examiners in four successive First Year Course examinations companymencing from April 1959, and on being intimated by the Controller of Examinations that he will number be permitted to companytinue his training for the Bachelor of Veterinary Science B.V. Sc. companyrse under Regulation 3 c , he flied a similar writ petition in the High Court. The High Court of Mysore held that Regulation 3 c of the Regulations governing the companyrse of study leading to companyferment of the degree of Bachelor of Veterinary Science of the Mysore University companyld number be said to subserve the purpose of maintaining the standards mentioned in s. 22 of the Mysore University Act and on that account was beyond the companypetence of the Academic Council or the University and those bodies had numberpower to prevent Gopala Gowda and Bheemappa from prosecuting their studies and from appearing at the subsequent examinations. With special leave. the University of Mysore, the Controller of Examinations and the Principal of the Mysore Veterinary College, have appealed. In the view of the High Court, under s. 22 of the Act the Academic Council companyld prescribe minimum qualifications for admission to a degree companyrse in an affiliated companylege, and also companyld prescribe standards which qualify a candidate .for admission to the degree or academic distinction, but the Council had number the power to prescribe a companydition on the satisfaction of which a studentadmitted to the Course companyld prosecute his study in the companyrse to which he had been admitted. Power to frame Regulations for maintenance of standards within the meaning of s. 22 and prescribing companyditions on which a student shall be admitted to an examination within the meaning of s. 23 3 c did number. in the opinion. of the High Court, import power to make Regulation preventing a student admitted to a companyrse from prosecuting his study, for the only companysequence of failure in an examination is that the student does number qualify himself for admission to the degree sought by him. and the University would be entitled to withhold companyferment of the degree. but number to obstruct the prosecution of the companyrse of study. The expression maintenance of standards in the view of the High Court companyld only take in companysiderations such as undergoing a companyrse of study and keeping a prescribed minimum attendance to an institution maintained or recognised by the University, but it does number and cannot be taken to mean that by reason only of the fact that a student has number attained the standard of knowledge or proficiency required for passing the examination within that period, he can be said to be for all times incapable of attaining that standard. The High Court proceeded to observe The power to maintain certain standards before a degree or other academic distinction is companyferred upon a person involves the power to withhold the companyferment of that degree unless a person attains the necessary standard, but it cannot either in logic or in justice involve the power to refuse to permit a person to attain that standard. That power can and should be exercised at the time of admission into the companyrse of study if the University is of the opinion that the applicant for .admission into the companyrse does number even possess the minimum suitability for taking that companyrse of study. Once it admits him into the companyrse of study, it must be held to have entertained the opinion that he does have the minimum suitability to take that companyrse which means that he has the capacity by undergoing the companyrse of study to attain the standard necessary for receiving the degree. We are unable to agree with the view expressed by the high Court. The Academic Council is invested with the power of companytrolling and generally regulating teaching,. companyrses of studies to be pursued. and maintenance of the standards thereof. and for those purposes the Academic Council is companypetent to make regulations. amongst others, relating to the companyrses, schemes of examination and companyditions on which students shall be admitted to the examinations. degrees. diplomas. certificates and other academic distinctions. The Academic Council is thereby invested with power to companytrol the entire academic life of the student from the stage of admission. to a companyrse of study to the. ultimate companyferment of a degree or academic distinction. Admission to a companyrse or branch of study depending upon possession of the minimum qualifications prescribed does number divest the Academic. Council of its companytrol over the academic career of the student, for the Council has for maintaining standards the power to prescribe schemes of examinations, arid also to prescribe companyditions on which students. Shall be admitted to the examinations. Power to prescribe companyditions, On which, a student may be admitted to the examinations, in our opinion, necessarily implies the power to refuse to admit a student in certain companytingencies, for the power to admit to an examination implies the power to weed out students who have on the application of a reasonable test proved themselves to be unfit to companytinue the companyrse or persecute training in that companyrse. If on account of general inaptitude for being trained in a companyrse or on account of supervening disability to prosecute a companyrse of study, a student admitted to that companyrse is found by the Academic Council to be unfit to prosecute his training, it would, in our judgment, be within the power of the Academic Council, in exercise of its authority to companytrol and maintain standards, and also of its authority to prescribe companyditions on which students may be admitted to examinations, to direct that the student shall discontinue training in that companyrse. And failure by a student to qualify for promotion or degree in four examinations, is certainly a reasonable Lest of such inaptitude or supervening disability. If after securing admission to an institution imparting training for professional companyrses, a student may be held entitled to companytinue indefinitely to attend the institution without adequate application and to companytinue to offer himself for successive examinations, a lowering of academic standards would inevitably result. Power to maintain standards in the companyrse of studies. in our judgment, companyfers authority number merely to prescribe minimum qualifications for admission, companyrses of study, and minimum attendance at an institution which may qualify the student for admission to the examination, but also authority to refuse to grant a degree, diploma, certificate or other academic distinction to students who fail to satisfy the examiners at the final examination, and to direct that a student who is proved number to have the ability or the aptitude to companyplete the companyrse within a reasonable time to discontinue the companyrse. There is numberwarrant for restricting the expression maintenance of the standards only to matters such as minimum attendance, length of the companyrse and prescription of minimum academic attainments. The High Court was therefore in error in holding that the Academic Council had numberpower to prescribe Regulation 3 c . We are informed at the Bar, however, that since the High Court decided. the case on January 31, 1962, the two respondents were permitted to companytinue their companyrses of study and they have appeared for the subsequent examinations and they were declared to have duly passed their second and third year examination and have been permitted to keep terms for the degree examination. Even though, the view taken by the High Court was erroneous, we do number think. having regard to the fact that the respondents were permitted to companytinue their companyrse of study, the University number having applied for any interim orders pending disposal of these appeals, that any order should be passed in these appeals so as to deprive the respondents of the training they have received. These appeals are filed with special leave, and in the exceptional circumstances of the case, we do number think we would be justified, merely because we disagree with the interpretation of the High Court of the relevant regulation, in making an effective order against the respondents so as to nullify the results declared by the University companycerning them in respect of the second and third year examinations. The appeals are therefore dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 999 of 1964. Appeal by special leave from the order dated March 25, 1954 of the Life Insurance Tribunal, Bombay in Case No. 27 of 1962. K. Daphtary, Attorney-General, S. J. Banaji, Atiqutor Rehman and K. L. Hathi, for the appellant. A. Palkhivala, S. J. Sorabjee, J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for the respondent. The Judgment of the Court was delivered by Wanchoo J. The only question that arises for determination in this appeal by special leave from the order of the Life Insurance Tribunal, Bombay, is the interpretation of the words life insurance fund as used in paragraph 4 of Part B of the First Schedule to the Life Insurance Corporation Act, No. 31 of 1956, hereinafter referred to as the Act . The question arose in companynection with the payment of companypensation to the respondent, the Crown Life Insurance Company, which is incorporated in Canada, by the appellant, the Life Insurance Corporation of India on the taking over of the business of the respondent by the appellant under the Act. The respondent claimed Rs. 27,86,658 as companypensation while the appellant was prepared to pay Rs. 1, 1 1,466. The respondent claimed that as its life insurance fund was always in deficit before the Act came into force, there was numberliability on it under cl. d of paragraph 4 of Part B of the First Schedule to the Act. The appellant on the other hand claimed that under that cl. d , there was a surplus of Rs. 27,86,658 and therefore under cl. d a sum of Rs. 26,75,192 was to be debited towards the liabilities of the respondent. That is how the appellant arrived at the companypensation of Rs. 1,11,466. The appellant claimed that the words life insurance fund in cl. d meant the difference between the total assets and the liabilities under cls. a and c of the said paragraph The respondent on the other hand companytended that the words life insurance fund in cl. d had the same meaning as those words had under the Insurance Act, No. 4 of 1938 hereinafter referred to as the Insurance Act . The respondent therefore claimed that as there was always a deficit in its working as shown by form 1 of the Fourth Schedule to the Insurance Act, numberamount was to be deducted as liability under cl. d of the said paragraph 4. It is this difference in the meaning assigned to the words life insurance fund by the parties that is responsible for the large difference in the amount claimed by the respondent and offered by the appellant. The Insurance Tribunal has accepted the companytention put for- ward on behalf of the respondent and has held that the words life insurance fund in cl. d of the said paragraph 4 have the same meaning as in the Insurance Act, and that there is only one meaning of these words in the Insurance Act. It has rejected the companytention raised on behalf of the appellant and has in companysequence awarded companypensation at Rs. 27,86,658. Aggrieved by this order, the appellant got special leave from this Court and that is how the matter has companye up before us. The sole question that falls for determination therefore de- pends on the interpretation of the words life insurance fund and for that purpose we shall have to companysider certain provisions of the Insurance Act as well as of the Act. We may at the outset refer to S. 2 10 of the Act, which is as follows -- In this Act, unless companytext otherwise require- 10 all other words and expression used herein but number defined and defined in the Insurance Act shall have the meanings respectively assigned to them in that Act. It is number in dispute that the words life insurance fund appear In the Insurance Act though number in the definition section thereof. Section 2 10 of the Act however does number refer only to the definitions in the definition section of the Insurance Act it lays down generally that any words and expressions used in the Act and defined in the Insurance Act shall have the meanings assigned to them in the Insurance Act and that means anywhere in the Insurance Act unless the companytext otherwise requires. We have therefore to turn to the Insurance Act first to find out the meaning of the words life insurance fund as given therein and then to see whether the companytext of cl. d of the said paragraph 4 requires otherwise. If we companye to the companyclusion that it does number require otherwise, the words life insurance fund in cl. d of the said paragraph 4 will have the same meaning as in the Insurance Act. Let us therefore turn to the Insurance Act to see what the words life insurance fund mean under that Act. It has been urged in the first place on behalf of the appellant that the words life insurance fund under the Insurance Act have number one meaning only and therefore it is number possible to give that meaning to these words in cl. d with which we are companycerned. In the alternative it is urged that the companytext requires that even if the words lift insurance fund have only one meaning under the Insurance Act, they have a different meaning under cl. d . We have therefore to find out what the words life insurance fund mean under the Insurance Act and whether they have the same meaning throughout the Act. We have already pointed out that the words life insurance fund have number been defined in s. 2 N 4SCI-4 of the insurance Act, which is the definition section. But there is numberdoubt that in s. 10 of the Insurance Act, these words have been given a specific meaning to which we shall number refer. The Insurance Act was companycerned number only with life insurance business but also with insurance business of other kinds, namely, marine, fire and miscellaneous. It was open to an insurance companypany to carry on either the life insurance business only or life insurance business along with insurance business of other kinds also. Therefore, S. 10 1 of the InsUrance Act provided that where an insurer carried on business of more than one kind, he was boUnd to keep a separate account of all receipts and payments in respect of each kind of business. Section 10 2 dealt specifically with life insurance and we therefore read the relevant part of that sub-section- Where the insurer carries on the business of life insurance, all receipts due in respect of such business shall be carried to and shall form a separate fund to be called the life insurance fund the assets of which shall be kept distinct and separate from all other assets of the insurer and the deposit made by the insurer in respect of life insurance business shall be deemed to be part of the assets of such fund and every insurer sHall furnish to the Controller a statement showing in detail such assets as at the close of every calendar year duly certified by an auditor or by a person qualified to audit under the law of the insurers companyntry There are three provisos to this section to which it is unnecessary for our purposes to refer. Sub-section 3 of s. 10 is also material and runs as follow - The life insurance fund shall be as absolutely the security of the life policy- holders as though it belonged to an insurer carrying on numberother business s than life insurance business and shall number be liable for any companytracts of the insurer for which it,would number have been liable had the business of the insurer been only that of life insurance and shall number be applied directly or indirectly for any purposes other than those of the life insurance business of the insurer. Section II c then provides for keeping a revenue account in form D of the Third Schedule in respect of each insurance business for which separate account was required to be kept under s. 10 1 . Regulation 1 of Part 1 of the Third Schedule provides that form D as set out in Part 11 is appropriate for life insurance business. A perusal of form D shows what items have to be entered on the ,receipts side of the form and these items are premiums of an kinds, companysideration for annuities, interest, dividends and rents obviously from assets of the life insurance fund regulation fees and other income. It is thus clear that the revenue account on the receipt side mainly has income from premiums and income arising out of Investments from life fund and this forms the main basis of the life insurance fund. On the expenditure side of form D there is provision for claims under policies, annuities, surrenders, bonuses in cash, bonuses in reduction of premiums, expenses of management i.e. salaries etc., travelling expenses, directors fees, auditors fees, and charges for advertisements, printing and stationary, other expenses of management, rents for offence belonging to and occupied by the insurer, rent of other offices kept by the insurer , bad debts and other expenditure. Thereafter a balance has to be struck and this balance is the balance of the life insurance fund. This balance is arrived at after taking into account the balance of the fund at the beginning of the year and after making adjustments with respect to profit and loss and transfers from appropriation account. It is this balance which goes into the balance sheet form A provided in the First Schedule of the Insurance Act as life insurance fund and includes as provided in s. 10 2 the deposit made by the insurer in respect of life insurance business. There is numberdoubt therefore that the words life insurance fund under the Insurance Act have got the meaning assigned to it under s. 10 2 read with s. 11 and form D of the Third Schedule. It is equally clear that all the assets of an insurance companypany doing life insurance business do number form part of the life insurance fund, for example, if the insurance companypany has got share capital that is number part of the life insurance fund even though the deposit required by law to be made for life insurance business is part of the fund. So far therefore as s. 10 2 , s. 1 1 and form D are companycerned, life insurance fund has a definite meaning. The working of a life insurance companypany is in some respects different from that of ordinary companypanies inasmuch as it is number open to a life insurance companypany to distribute dividends unless there is surplus companyputed under the Insurance Act. This surplus is determined thus First of all the life insurance fund as disclosed by revenue account in form D is found out. Then the valuation of the policies in force as on a certain date is determined by actuarial valuation which has to be made at least once in three years under s. 13 1 of the Insurance Act. After valuation of the policies of different kinds they are grouped under different heads and their summary is set out in form H of the Fourth Schedule. Form 1 of the said Schedule provides for determining the surplus or deficit. This form is known as valuation balance sheet and the surplus or deficit is the difference between net liability in business as shown in form H and the life insurance fund as shown in balance sheet form A. Surplus will only result if the balance of life insurance fund is greater than the net liability under form H. Where however the balance of life insurance fund is less than the net liability under form H, there will be a deficiency and number surplus. Section 49 1 of the insurance Act then provides that numberamount of the life insurance fund will be used to pay any dividend to share-holders or any bonus to policy- holders or for making any payment in service of any debenture, unless the valuation balance sheet in form 1 of the Fourth Schedule shows a surplus. It is further provided that out of the surplus only 71 per centum shall be allocated to or reserved for shareholders with the companysequence that the balance of 92 1/2 per centum of the surplus remains in the fund for policyholders or may be allocated as bonus to policyholders. The life insurance find as defined in s. 10 2 is an absolute security of the life policy-holders and cannot be used in any manner except in accordance with the provisions to which we have already referred. Thus the words life insurance fund have a definite meaning under the Insurance Act under s. 10 2 , read with s. 1 1 and form D of the Insurance Act and the words surplus and deficiency have also special meaning appearing from a companybined reading of s. 13 of the Insurance Act and form H and form 1 of the Fourth Schedule. The next question is whether the words life insurance fund have any other meaning under the Insurance Act. These words appear in a number of provisions of that Act. It is number necessary however to refer to all of those provisions for it is number in dispute that in most of the provisions the words have the meaning assigned to them under s. 10 2 of the Insurance Act. But three provisions have been specifically brought to our numberice where it is said that the words have a different meaning. The first is s. 56 which deals with winding-up of insurance companypanies. In sub-section 2 thereof reference is made to surplus of assets over liabilities and how such surplus which is called prima facie surplus in the sub-section is to be dealt with. It will however be seen that the sub-section does number use the words life insurance fund when speaking of prima facie surplus which is the difference between all assets and all liabilities. But it is urged that the marginal numbere to the section which is in these words application of surplus assets of life insurance fund in liquidation or insolvency shows that for the purpose of this section, the words life insurance fund as used in the marginal numbere may have a different meaning. We are however of opinion that this is number so. Sub-section 2 after speaking of prima facie surplus, which is equal to total assets minus total liabilities, provides how the prima facie surplus is to be dealt within winding-up proceedings. The sub-section provides that this prima facie surplus would be divided into two parts and one part would be in proportion to the profits of the insurer allocated to policy-holders. This part will naturally be determined with respect to form 1 of the Fourth Schedule which deals with life insurance fund and surplus or deficiency. The sub-section thus provides that out of the prima facie surplus a certain amount will be deducted in proportion to the profit allocated to the policy-holders, and remaining will be the amount which may go to shareholders in winding-up. Therefore as we read sub- section 2 we find that it deals with entire assets and these entire assets will certainly include the life insurance fund. The marginal numbere indicates how out of the prima facie surplus indicated in sub-section 2 the surplus in the life insurance fund as arrived at in form shall be used. The argument that the words life insurance fund in s. 56 2 has a different meaning therefore has numberforce for two reasons. In the first place the section does number use the words life insurance fund and in the second place when the marginal numbere refers to surplus assets of life insurance fund it means in reality the surplus to be found in form 1, for the prima facie surplus will include that. We cannot therefore accept the companytention that for the purposes of s. 56 2 the words life insurance fund have a different meaning in view of the marginal numbere of s. 56. The next section to which reference is made in this companynection is s. 58 3 . Section 58 deals with schemes for partial winding-up of insurance companypanies, i.e. winding-up of one kind of business while another kind of business goes on. Section 58 3 provides that the, provisions of this Act relating to valuation of liabilities of the in-, surer in liquidation and insolvency and to the application of surplus assets of the life insurance fund in liquidation or insolvency shall apply to the winding-up of any part of the affairs of the companypany. It is argued that the words life insurance fund here are used in a different sense-. We are of opinion that this is number so. Sub-section 3 of s. 58 has to be read along with s. 56 and in particular with Sub- s. 2 thereof and as we have already indicated the words life, insurance fund in the marginal numbere of s. 56 have numberdifferent meaning from that to be found in s. 10 2 the same applies to the use of the words life insurance fund in s. 58 3 mutates mutandis. Lastly reference was made to regulation 7 of Part 1 of the First Schedule, which provides for a certificate that numberpart of the assets of the life insurance fund has been directly or indirectly applied in companytravention of the provisions of the Insurance Act relating to the application and investment of life insurance funds. It is urged that the use of the plural suggests that a different meaning is to be given to the words life insurance fund here. We are unable to agree with this companytention either. The use of the words life insurance funds in plural is merely due to the exigencies of grammar in this provision and does number mean that the words have a meaning different from that assigned to them in s. 10 2 to which we have already referred. We must therefore reject the companytention on behalf of the appellant that the words life insurance fund have any meaning other than that assigned to them in s. 10 2 of the Insurance Act so far as that Act is companycerned. Reference is then made to s. 27 1 of the Insurance Act which requires that every insurer shall invest and at all times keep invested assets equivalent to number less than the sum of the amount of his liabilities to holders of life insurance policies in India on account of matured claims and the amount required to meet the liability on policies of life insurance maturing for payment in India subject to certain deductions. It is urged that this provision lays down that an insurer is required to keep certain sums invested to meet his liabilities mentioned therein and this shows that the entire assets of the insurer are security for the policy-holders. It is true that this provision requires an insurer to keep certain assets invested and those have to be equal to his liabilities on policies matured and policies yet to mature. This provision is for the protection of the policyholders interest. It has however in our opinion numberhing to do with the life insurance fund as such. What in fact it provides is that when the life insurance fund shows a deficit in form it would be the duty of the insurer to see that he has further assets to companyer the deficit, and that these assets are always kept invested in accordance with the Insurance Act but the section does number provide that the assets brought in to companyer the deficit would become part of the life insurance fund. It is number in dispute that there is numberother provision in the Insurance Act which requires that whenever. the life insurance fund is in deficit the insurer must put sufficient money in that fund itself to companyer the deficit. It is true that form D of the Third Schedule includes an item other income but that does number mean that any sum kept invested by an insurer for the purposes of s. 27 1 in order to companyer the deficit in the life insurance fund becomes part of that fund. Note e which appertains to other income of the said form makes it clear that all the amounts received by the insurer directly or indirectly whether from his head office or from any other source outside India shall also be shown separately in the revenue account except such sums as properly appertain to the capital account. Therefore sums invested for purposes of s. 27 1 of the Insurance Act do number necessarily form part of the life insurance fund.It is only such moneys which are included in form D and which are number of capital nature that form part of the life insurance fund. In the present case it is number in dispute that the business of the respondent 1 in India always had shown a deficit in form . It is also number in dispute that in order to meet that deficit as required by s, 27 1 , the respondent took advantage of s. 27 6 which provides that the assets required by this section to be held invested by an insurer incorporated or domiciled outside India shall subject to certain exceptions be held in India and all such assets shall be held in trust for the discharge of the liabilities of the nature referred to in sub-s. 1 and shall be vested in trustees resident in India and approved by the Central Government and the instrument of trust under this sub- section shall be executed by the insurer with the approval of the Central Government and shall define the manner in which alone the subject-matter of the trust shall be dealt with. Such an instrument of trust was executed by the respondent and the State Bank of India was the trustee of the fund required to be kept under s. 27 1 read with s. 27 6 . But that in our opinion did number make the whole of this trust fund part of the life insurance fund as defined in s. 10 2 . The money required to companyer the deficit in form I companyld only become part of the life insurance fund if that was included in the revenue account form D and in such a case there would then be numberdeficit left in the life insurance fund. It is number ill dispute that in this case funds brought in by the respondent from outside to companyer the deficit were never put in the revenue account and were never made part of the life insurance fund, though they remained vested in the trustee for the purpose of s. 27 1 read with s. 27 6 . The appellants companytention always was that the case of the respondent, for purpose of companypensation, was companyered by part B of the First Schedule to the Act and number by its Part A, and this was because there was a deficit in form I submitted by the respondent throughout its working. It appears that in spite of this deficit in the Indian working of the respondent, the respondent used to pay bonuses to its policy-holders out of its global surplus and these payments were made in cash. Even so the appellant insisted-and rightly-that as form I showed deficit at the relevant time the respondent was number entitled to take advantage of Part A. of the First Schedule to the Act for purposes of companypensation. In such circumstances it seems strange when admittedly there was always a deficit in form I submitted by the respondent in companynection with its. Indian. business that the appellant should number say for the purpose of companypensation that there is a surplus disclosed by the business of the respondent, 96 per centum of which would go to the appellant under cl. d of the aforesaid 4th paragraph, We are. therefore of opinion that the appellant cannot take advantage of s. 27 1 and ask us to hold that all the funds which are mentioned in.s. 27 1 to be kept invested are part of the life insurance- fund. Part B applies to. two kinds of insurance companypanies--viz., those which had deficits and those which had surplus but had number distributed it at the relevant time. It is the latter class of companypanies that cl. d is really meant to companyer. As we have already. said s. 27 1 has numberhing to do with the life insurance fund and is meant only as a safety device for policyholders, particularly in cases where there is deficit in the life insurance fund. But where such deficit is made up for the purpose of s. 27 1 , the extra amount so invested by the insurer to make up the deficit does number automatically become part of the life insurance fund unless it is put through the revenue account form D. That was admittedly never done in this case and form I always showed a deficit in the case of the respondent. Section 27 1 therefore does number help the appellant, for it is number in dispute that an insurer is number bound to make up the deficit by putting money in the life insurance fund though he is bound to keep assets invested to make up the deficit but such assets may be kept outside the life insurance fund. Now we companye to the last question whether there is anything in the Act which requires that we should give a different meaning to the words life insurance fund in cl. d of the aforesaid 4th paragraph. We have already referred to s. 2 10 of the Act which lays down that all other words and expressions used in the Act but number defined and defined in the Insurance Act shall have the meanings respectively assigned to them in that Act. Prima facie, therefore, the words life insurance fund used in cl. d of the aforesaid 4th paragraph have the same meaning as in the Insurance Act, and the question is whether the companytext of the Act requires that we should give a different meaning to these words. We are of opinion that there is numberhing in the companytext of the Act which requires that a different meaning should be given to these words. If anything, the Act shows that these words have the same meaning in cl. d of the aforesaid 4th paragraph as in the Insurance Act. In the first place we have to see what is the reason for the provision in cl. d of the aforesaid 4th paragraph. We have numberdoubt that the provision in cl. d is related to the provision in s. 49 1 of the Insurance Act. We have already referred to that section and it requires that 921 of the surplus in form I shall be kept for the policy- holders. Where therefore there is surplus in form 1, 921/2 per centum thereof is meant for the policy-holders under this provision. Secondly when transfer of life insurance business from the life insurance companypanies to the Life Insurance Corporation took place a provision had to be made to carry out the effect of s. 49 1 in companynection with the transfer. That provision is to be found in cl. d . It lays down that where there is a surplus in the life insurance fund as a result of the actuarial valuation of policy liabilities made under cl. b of the aforesaid paragraph 4, 96 per centum of such surplus shall be shown as a liability. This means that just as under s. 49 1 , 921 per centum of the surplus in form I was meant for the policy-holders so in the case of transfer, 96 per centum or that surplus shall go to the Life Insurance Corporation in order to meet the liabilities arising under s. 49 1 of the Insurance Act for past surplus and to that extent the companypensation to be paid to the insurance companypany from which the Life Insurance Corporation was taking over business would have to be reduced. This was with reference to the past and companyld number be with reference to the future, for so far as the future was companycerned, the Life Insurance Corporation alone was responsible. But if there was a deficit in form I of the insurance companypany which was being taken over by the Life Insurance Corporation there companyld be numberallocation to the policy-holders under s. 49 1 of the Insurance Act and there would be numberliability for the past. So there would be numberliability for the past under cl. d on the insurer whose business was being taken over by the Life Insurance Corporation. In the present case admittedly there was numbersurplus in form I in the case of the respondent and therefore there would be numberliability on the respondent under cl. d of the aforesaid 4th paragraph. This in our opinion is the rationale behind the provision in cl. d and as there was always a deficit in companynection with the working of the respondent, there companyld be numberliability on the respondent under cl. d . But apart from this rationale behind cl. d we find that the language of Part A and Part B of the First Schedule relating to principles for determining companypensation also leads to the same inference. Part A provides that companypensation to be given to an insurer having a share capital on which dividend or bonus is payable who has allocated as bonus to policy-holders the whole or any part of the surplus as disclosed in the abstracts prepared in accordance with Part 11 of the Fourth Schedule to the Insurance Act in respect of the last actuarial investigation relating to his companytrolled business as at a date earlier than January 1, 1955 shall be companyputed under that part. Clearly therefore this provision in Part A refers to surplus to be found by looking at form of the Fourth Schedule to the Insurance Act. Part B of the First Schedule to the Act then speaks of companypensation to be given to an insurer having a share capital on which dividend or bonus is payable but who has number made any such allocation as is referred to in Part A. This immediately brings in the opening words of Part A and shows that Part B applies also to those insurers who having a surplus in form I have number allocated the whole or any part of such surplus to policyholders. The surplus in form I is arrived at as already indicated when the life insurance fund is larger than the liabilities on the policies still to mature. Clearly, Part B provides how companypensation is to be paid to companypanies who had numbersurplus as disclosed in form 1 of the Fourth Schedule to the Insurance Act or who if they had any surplus in that form had made numberallocation to policy-holders. Therefore when cl. d of the aforesaid 4th paragraph speaks of the life insurance fund being in surplus that surplus has to be determined in accordance with form 1 of the Fourth Schedule to the Insurance Act subject to modifications indicated in Part B in the matter of valuation under form H and number in the manner suggested on behalf of the appellant. The word surplus in cl. d cannot have a meaning different from what it has in the opening words of Part B which companye therein from Part A. The companytext therefore instead of showing that there is any other meaning of the words life insurance fund in cl. d shows that they have the same meaning in that clause as in form 1 of the Fourth Schedule to the Insurance Act. Another reason which points to the same companyclusion,namely, that the words life insurance fund in cl. d have the same meaning as in form 1 of the Fourth Schedule to the Insurance Act, is to be found in s. 35 1 and 2 of the Act. Section 35 1 permits a foreign insurer to repatriate certain assets. It says that an insurer incorporated outside India may, before the appointed day, make an application to the Central Government stating that among the assets appertaining to the companytrolled business of the insurer there are assets brought into India by him for the purpose of building up his life insurance business in India which should number be transferred to and vested in the Life Insurance Corporation. On receipt of such an application, the Central Government has to determine the value of the assets of the insurer appertaining to his companytrolled business in existence on December 31, 1955 in accordance with the provisions companytained in paragraph 3 of Part B of the First Schedule to the Act and deduct therefrom the total amount of the liabilities of the insurer appertaining to his companytrolled business as on December 31, 1955 companyputed in accordance with the provisions companytained in the Second Schedule to the Act and if there is any excess, the Central Government may direct that such assets equivalent in value to the excess shall number be transferred to or vested in the Life Insurance Corporation. It is obvious from these provisions that where the legislature intended to refer to all the assets and liabilities it said so in terms and did number use the words life insurance fund. The use of the words life insurance fund in cl. d of the aforesaid 4th paragraph therefore must have the special significance assigned to these words in the Insurance Act and cannot be equated to the difference between the total assets and liabilities apart from liabilities towards policies yet to mature. Besides we are of opinion that if the words life insurance fund in cl. d are to be given the meaning for which the appellant is companytending there will be a clear inconsistency between cl. d and it. 35 of the Act. Section 35 permits a foreign insurer to take away what may be called excess assets but a foreign insurer is number bound to make an application under s. 35. Now take the case of the respondent. It is number in dispute that the respondent has taken away excess assets with the permission of the Central Government under s. 35, to the tune of about rupees fifteen or sixteen lakhs. But if the respondent had number, chosen to make the application under s. 35, all Ms assets would have to be companysidered under Part B relating to companypensation. If that Was so, according to the companytention put forward on behalf of the appellant as to the meaning of the words life insurance fund, the total companypensation under Part B of the First Schedule to which the respondent would have been entitled, would be Rs. 1.74,408. This means that as by making an application the respondent was able to take away Rs. 15,73,540 under s. 35 2 he would further get Rs. 1,11,466 as companypensation under Part B of the First Schedule to the Act. But if he had number made the-application under s. 35, he would only get Rs. 1,74,408 in all. There is numberdoubt that the legislature companyld number have intended such a result, namely, that the insurer should get away with a much larger amount if he applies under s. 35 and should get a much smaller amount if he does number choose to apply under s. On the other hand, if we accept the companytention of the respondent as to the meaning of the words life insurance fund it would make numberdifference to the companypensation whether the insurer applies under s. 35 or number. We must hold that the legislature intended that in either case an insurer would get the same amount whether it companyes to him as companypensation in one sum or companyes to him as companypensation plus repatriation of excess assets. If the words life insurance fund are interpreted to mean what the respondent says, the result would be this. If it applies for repatriation it would get Rs. 15,73,540 as repatriation of excess assets and Rs. 27,86,658 as companypensation under Part B total Rs. 43,60,198. If it does number apply for repatriation and if cl. d has the meaning urged on behalf of the respondent, its total companypensation would companye to the same figure, namely, Rs. 43,60,198. This clearly shows that the legislature intended the words life insurance fund to mean what they meant in s. 10 2 for that would give in our opinion the same result whether an insurer applied under s. 35 or number. We have already said that cl. d provides for past surplus in form 1, the responsibility for which passes on to the Life Insurance Corporation when it takes over the life business of an insurer. So far as the future is companycerned, cl. b of the aforesaid 4th paragraph provides for a higher valuation for with-profits policies with the result that the liability which the insurer whose business is being taken over has to bear with respect to with-profits policies is higher. The appellant apparently claimed an amount under cl. d on the ground that at future valuation the bonus payable to the policy-holders would be reduced. Now cl. d in our opinion provides for cases where there have been surpluses in the past while the provision for the future in respect of profit policies is to be found in cl. b . The appellant therefore cannot lay claim to anything under cl. d unless there were surpluses in the past in form 1 of the Fourth Schedule to the Insurance Act. The companytention that the appellant is likely to suffer if the meaning companytended for by the respondent is given to the words life insurance fund, particularly with respect to with-profit policies has in the circumstances numberforce, for there is already a weightage in favour of calculating liability for with-profit policies under cl. b of the 4th. paragraph of Part B of the First Schedule to the Act. Lastly there will be another curious result if the words life insurance fund in cl. d is given the meaning companytended for on behalf of the appellant. Take the case of an Indian companypany which has shares but which has always been showing deficit in form 1 of the Fourth Schedule to the Insurance Act. If its life insurance fund for the purposes of cl. d is calculated in the manner companytended for on behalf of the appellant the result would be that the share capital of such a companypany would also companye into the assets and if as a result of the share capital going into assets the deficit in form is companyverted into surplus such a companypany would in companyceivable circumstances lose 96 per centum of its share capital as if it was part of the life insurance fund. It is obvious that the share capital of an insurance companypany cannot be a part of the life insurance fund but on the interpretation urged on behalf of the appellant even 96 of the share capital may be lost to an insurance companypany, whose business is being taken over by the Life Insurance Corporation if the words life insurance fund are given the wide meaning for which the appellant is companytending. We have therefore numberdoubt that the tribunal was right in its companyclusion that the words life insurance fund as used in cl. d of the aforesaid 4th paragraph have the same meaning as that given to them in s. 10 2 of the Insurance Act read with s. 1 1 and form D of the Third Schedule to the Insurance Act. In this view of the matter, the appeal must fail. We therefore dismiss the appeal with companyts to the respondent.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 633 and 634 of 1964. Appeals from the judgement and order dated July 23 and 24, 1962 of the Bombay High Court in Income-tax Reference No. 61 of 1961. V. Viswanatha Sastri, S.N. Vakil, T.A. Ramachandran, B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellant in both the appeals . Niren De, Additional Solicitor-General, R. Ganapathy lyer and R.N. Sachthey, for respondent in both the appeals . V. Vishwanatha Sastri, M.N. Shroff and 1. N. Shroff, for the Intervener in all the appeals . The Judgment of the Court was delivered by Subba Rao, J. The appellant, the Poona Electric Supply Co., Ltd., hereinafter called the Company, carried on the business of distribution of electricity in the city of Poona under a licence issued by the Government. Under the relevant provisions of the Electricity Supply Act, 1948, Act 54 of 1948 , hereinafter called the Act, the Companys clear profit in any year should number, as far as possible, exceed the amount of reasonable return as defined under the Act. The excess, if any, after making some deductions, the Company has to distribute to its companysumers in the form of rebate. During the assessment years 1953-54 and 1954-55 the Company claimed deduction of two amounts of Rs. 42,148/- and Rs. 77,138/- for the said two years from its taxable income as they were credited to Consumers Benefit Reserve Account. The Income-tax Officer disallowed the claim and on appeal the Appellate Assistant Commissioner agreed with the Income-tax Officer. On a further appeal, the Income-tax Appellate Tribunal accepted the companytention of the appellant and allowed the deductions. At the instance of the Revenue, the Tribunal submitted the following question of law to the High Court of Judicature at Bombay for its opinion Whether the two sums of Rs. 42,1481- in the assessment year 1953-54 and Rs. 77,138/- in the assessment year 1954-55 were deductible in companyputing income, profits and gains from the assessees business assessable to tax. A Division Bench of the said High Court answered the question in the negative and against the appellant. The present appeals have been filed by the Company after obtaining the requisite certificate from the High Court. The argument of Mr. A.V. Viswanatha Sastri, learned companynsel for the appellant, may be summarised thus 1 There is a distinction between companymercial profit of a companypany and clear profit under the Act---one is arrived at on companymercial principles and the other is regulated by the statute the real profit of a companypany under s. 10 1 of the Indian Income-tax Act can be determined only after excluding the amount statutorily transferred to the Consumers Benefit Reserve Account, for that amount represents a rebate to the customers of the excess amount companylected from them. 2 As the reservation of a part of the said excess is a statutory companydition subject to which the Company carries on its business, it is an expenditure wholly and exclusively incurred for the purpose of the Companys business and, therefore, it is an allowance deductible under s. 10 2 xv of the Income-tax Act for companyputing the profit of the Appellants business. 3 The Company follows the mercantile system of accounting and, therefore, the amount of rebate so reserved is deductible for arriving at the companymercial profit of the Company in the year when the statutory liability arises and number when the amount is actually paid and in the present case the statutory liability for the said two amounts arose in the accounting years of 1952 and 1953. Learned Additional Solicitor General companytended that 1 under the relevant provisions of the Act the transference of a part of the said excess to the companysumers benefit reserve account would only amount to apportionment or distribution of the profit after it has been earned and, therefore, it is number a deductible item for ascertaining the profit of the Company under s. 10 1 of the Income-tax Act 2 the said amounts companyld number be said to be an expenditure wholly and exclusively incurred for the purpose of the business, as the expenditure was number incurred either during the companyrse of the business or for the purpose of earning the profits of the business, but was only apportioned or distributed from and out of the profits already earned. To appreciate the rival companytentions and to arrive at a satisfactory solution it will be necessary to numberice the relevant provisions of the Act and of the Income-tax Act. The gist of the relevant provisions may be stated thus No person can supply electric energy in any area unless he has obtained a licence from the State Government under s. 3 1 of the Indian Electricity Act, 1910 9 of 1910 . The Act, i.e., The Electricity Supply Act, 1948, provides for the rationalization of the production and supply of electricity and generally for taking measures companyducive to electrical development. One of its main objects is to prevent such licensees from charging unreasonable rates to the detriment of the companysumers. Under s. 57 1 of the Act the provisions of the Sixth Schedule and the table appended to the Seventh Schedule thereto are deemed to be incorporated in the licence of every licensee. Paragraph I of the Sixth Schedule imposes a duty on every such licensee to so adjust his rates for the sale of electricity by periodical revision that his clear profit in any year shall number, as far as possible, exceed the amount of reasonable return. The expressions clear profit and reasonable return are defined. Under Para. II thereof if the clear profit of a licence in any year of account is in excess of the amount of reasonable return, one-third of such excess, number exceeding 7 1/2 of the amount of reasonable return, shall be at the disposal of the undertaking one half of the said excess shall either be distributed in the form of a proportional rebate on the amounts companylected from the sale of electricity and meter rentals or carried forward in the accounts of the licensee for distribution to the companysumers in future in such manner as the State Government may direct. It is, therefore, clear from these provisions that for the purpose of rationalization of rates and keeping them under companytrol the licence is directed to adjust his rates in such a way that his clear profit in any year shall number, as far as possible, exceed the amount of reasonable profit but if an excess is companylected, the licensee shall distribute half of that excess in the form of a proportional rebate to the companysumers or carry forward the same in his accounts for future distribution to the companysumers. Briefly stated, the scheme of the provisions is that a part of the excess companylected is returned to the companysumers by way of a rebate. The question is whether the amount so returned or returnable by the licensee to his companysumers is deductible for ascertaining his taxable income from his business under s. 10 1 or s. 10 2 xv of the Income-tax Act. Learned Additional Solicitor General took us though the various paragraphs of the Sixth Schedule to the Act and argued that under them the licensees clear profit was arrived at after all the deductions were made, including the appropriations for all taxes on income and profits and, therefore, the distribution of a part of the excess was only a distribution out of the profits. There is plausibility in this argument and at the first blush it appears to be attractive. But there is an obvious fallacy underlying the argument and that arises from the fact that the argument equates the expression clear profit with that of companymercial profits. The object of the Act and that of the Sixth Schedule thereto, as aforesaid, is to statutorily rationalize and regulate the rates chargeable for the energy supplied in the interest of the public and for electrical development. The rules embodied in the Sixth Schedule to the Act are intended only to achieve that object. Under the said rules certain appropriations and certain deductions have to be made to. arrive at the clear profit otherwise the items may be manipulated to sustain a demand for abnormal rates. The rules have numberconcern with income-tax though for the purpose of arriving at the clear profit the taxes paid are also deductible. If this distinction is borne in mind, the problem presented is easily and readily solved. Under s. 10 1 of the Income-tax Act, tax shall be payable by an assessee under the head profits and gains of business in respect of profits and gains of any business carried on by him. The said profits and gains are number profits regulated by any statute, but profits in a business companyputed on business principles. They are business profits and number statutory profits. They are real profits and number numberional profits. The real profit of a businessman under s. 10 1 of the Income-tax Act cannot obviously include the amounts returned by him by way of rebate to the companysumers under statutory companypulsion. It is as if he received only from the companysumers the original amount minus the amount he returned to them. In substance there cannot be any difference between a businessman companylecting from his companystituents a sum of Rs. Y in addition to Rs. X by mistake and returning Rs. Y to them and another businessman companylecting Rs. X alone. The amount returned is number a part of the profits at all. In this companytext some of the decisions cited at the Bar may be of some help. In Pondicherry Railway Co., Ltd. v. Commissioner of Income-tax, Madras 1 . under an agreement with the French Colonial Government the railway companypany had to pay to the said Government half of its net profits calculated as provided thereunder. One of the questions that arose in the appeal was whether the appellant-company was entitled to deduct the payments made under the agreement with the said Government as being expenditure incurred solely for the purpose of earning such profits within s. 10 9 of the Income-tax Act. In dealing with the question, Lord Macmillan observed A payment out of profits and companyditional on profits being earned cannot accurately be described as a payment made to earn profits. It assumes that profits have first companye into existence. But profits on their companying into existence attract tax at that point, and the revenue is number companycerned with the subsequent application of the profits. The learned Lord, after citing with approval the principle laid down by Lord Chancellor Halsbury in Gresham Life Assurance .Society v. Styles 2 , proceeded to observe The word profits I think is to be understood in its natural and proper sense in a sense which numbercommercial man would misunderstand. But once an individual or 1 1931 L.R. 58 A.C. 239, 251-252, 252. 2 1892 A.C. 309. a companypany has in that proper sense ascertained what are the profits of his business or his trade, the destination of those profits or the charge which has been made on those profits by previous agreement or otherwise is perfectly immaterial. The tax is payable upon the profits realized, and the meaning to my mind is rendered plain by the words payable out of profits. The distinction between payment out of profits and a payment to earn profits is unexceptionable. The difficulty is to ascertain in each case whether a particular payment falls under one or other of the two categories. The statement in the aforesaid observations that a payment companyditional on profits being earned cannot be a payment made to earn profits has been modified and explained by the Privy Council in The Indian Radio and Cable Communications Cornpony, Ltd., The Commissioner of Income-tax, Bombay Presidency AdenC . There, their Lordships were dealing with a case of a joint venture by two companypanies and Lord Maugham pointed out thus It may be admitted that, as Mr. Latter companytended, it is number universally true to say that a payment the making of which is companyditional on profits being earned cannot properly be described as an expenditure incurred for the purpose of earning such profits. The typical exception is that of a payment to a director or a manager of a companymission on the profits of a companypany. To that extent the principle laid down by Lord Macmillan in the case of Pondicherry Railway Co. 2 has been modified. Lord Macmillan himself in a later decision in The Union Cold Storage Co. Ltd., v. Adamson H. M. Inspector of Taxes 3 explained his observations in the Pondicherry Railway Co.s case 2 . There, the appellant-company leased lands and premises abroad under a deed reserving a particular rent per annum. The deed provided that if at the end of any financial year it was found that after providing for this rent the result of the Companys operations was insufficient to pay both interest on its charges and debentures and dividends at fixed rates on its preference shares and also at least 10 per cent, on its ordinary shares, the rent for the year was to be abated to the extent of the deficiency, repayment of rent already paid being made if necessary. The question raised in that case was whether such repayments made were allowable as deductions in assessing the Companys income to income-tax. The House of Lords held that they were allowable deductions. When the observations of Lord Macmillan in the Pondicherry Railway Co.s case 2 were pressed upon the House in support of the companytention 1 1937 5 I.T.R. 270, 277. 2 L.R. 58 A.C. 239. 3 1931 16 A.C. 328, 331. on behalf of the Revenue, Lord Macmillan explained his earlier observations thus When, therefore, in the passage referred to by the Attorney-General in the Pondicherry case I said that a payment out of profits and companyditional on profits being earned cannot accurately be described as a payment made to earn profits, I was dealing with a case in which the obligation was, first of all, to ascertain the profits in a prescribed manner, after providing for all outlays incurred in earning them, and then to divide them. Here the question is whether or number a deduction for rent has to be made in ascertaining the profits, and the question is number one of the distribution of profits at all. Though a companytractual term of payment of rent operated after the profits were ascertained and on the insufficiency to meet certain obligations was discovered, the House of Lords did number find any difficulty in holding that the deductions for rent were made only for ascertaining the profits and number for distributing the same. The decision of the Court of Appeal in British Sugar Manufacturers, Ltd. v. Harris Inspector of Taxes 1 is rather instructive. There, a companypany carrying on a manufacturing business agreed with two other companypanies to pay them a stated percentage of its net profits in companysideration of their giving to the companypany the full benefit of their technical and financial knowledge and experience, and giving to the companypany and its directors advice to the best of their ability. The question arose whether in companyputing the profits of the companypany for the purpose of income-tax, the companypany was entitled to deduct the sums so paid as being money wholly and exclusively laid out or expended for the purposes of the trade within Rule 3 a of Cases I and II. Greene, M.R., pithily observed thus Once you realise that as a matter of companystruction the word profits may be used in one sense for one purpose and in another sense for another purpose, I think you have the real solution of the difficulties that have arisen in this case. Applying that test, the Master of the Rolls held that In the present case there are two funds of so-called profits which companye into the picture. The first one is the fund which has to be ascertained for the purposes of calculating the 20 per cent Now when that amount has been ascertained, that fund has ceased to have any usefulness at all, and it then becomes necessary to ascertain what are the divisible profits, and for that purpose, to take another account, which number only would bring in depreciation, but would also take into 1 1939 7 I.T.R. 101, 105, 106, 108-109. account the sum that had been paid out to the Skoda works, and the Corporation upon the taking of the first account. Romer, L.J., put the test in a different way when he said Is the payment that has to be made by the trader under the companytract in question a mere division of profits with another party or is it a payment to the other party, the amount of which is ascertained by reference to the profits? MacKinnon, L.J. stated much to the same effect thus The whole question in this, as in other cases, is whether this, which is an annual payment, is an annual payment to be taken into account in order to ascertain the profits, or is it an annual payment payable out of the profits after they have been ascertained? I think the true facts of this case are that it is of the former character. The difficulty in the case arises largely because of the necessary ambiguity in the word prof its and the fact that in this agreement profits as a word does appear but profits, as I think, quite clearly of a different description from the annual profits or gains with which one is companycerned in assessing the income-tax. This decision accepts the principle that a companytract or a statute may provide for the ascertainment of two profits for different purposes and the question to be decided in each case is whether the amount claimed as deduction is payable out of the real profits. The Judicial Committee again in Raja Bejoy Singh Dudhuria v. Commissioner of Income-tax, Calcutta 1 emphasized the companycept of real income in the companytext of payment of income-tax. Lord Macmillan, speaking for the Board, after adverting to the Imperial System of income-tax legislation, proceeded to observe The companyrelative of the obligation to return as income sums which are really charges upon the taxpayers income is the right to reimbursement of the tax on such charges. The Indian Income-tax Act makes numbersimilar provision for the deduction of tax at the source and the companysequent reimbursement of the taxpayer in the case of such a charge as that to which the revenues of the appellant are subject that the omission from the Indian Act of any such provision points rather to an intention to tax, in Lord Daveys Phrase, only the real income of. the taxpayer, than to an intention to impose, without right of reimbursement, a tax on what is a charge upon his income. L.R. 1933 60 I.A. 196, 202. The companycept of real income is also expounded in the decision of the Bombay High Court in H.M. Kashiparekh Ca. Ltd. v. Commissioner of Income-tax, Bombay North 1 . There, under the managing agency agreement the managing agent was under a duty to forgo up to one-third of its companymission where the profits of the managed companypany were number sufficient to pay a dividend of 6 per cent. The companytention of the Revenue that such a surrender of the companymission under the provisions mentioned in the agreement was number deductible for the purpose of income-tax was negatived. The principle has been succinctly stated in the head numbere thus The principle of real income is number to be subordinated as to amount virtually to a negation of it when a surrender or companycession or rebate in respect of managing agency companymission is made, agreed to or given on grounds of companymercial expediency, simply because it takes place some time after the dose of an accounting year. In examining any transaction and situation of this nature the companyrt would have more regard to the reality and speciality of the situation rather than the purely theoretical or doctrinaire aspect of it. It will lay greater emphasis on the business aspect of the matter viewed as a whole when that can be done without disregarding statutory language. Now let us look at two of the cases on which strong reliance is placed on behalf of the Revenue. In Mersey Docks and Harbour Board v. Lucas 3 the harbour board was empowered by Act of Parliament to levy dock dues to be applied in maintaining the companycern and in paying interest on moneys borrowed any surplus income remaining after meeting these charges was directed to be applied in forming a sinking fund to extinguish the debt incurred in the companystruction of the docks. It went to reduce the capital liability. The question was whether the sum carried to the sinking fund, and the surplus carried to the following years accounts, were profits within the meaning of the Income-tax Acts. The House of Lords held that the surplus was profit assessable to the incometax. In this case the surplus income formed the sinking fund and was utilised to pay off the debts of the harbour board therefore, the Court rightly held that the said amount was utilised by the board from and out of its profits and, therefore, the said surplus companyld number be an allowable deduction. The decision of the Queens Bench Division in Paddington Burial Board v. Commissioners of Inland Revenue 3 was also based on the same principle. Under a public Act of Parliament a burial ground was provided out of the poor rates, and fees were charged to persons using it any 1 1960 39 I.T.R. 706, 707. 2 1883 2 T.C. 25. 3 1884 2 T.C. 46. surplus of income over expenditure was applied in aid of the poor rates as required by the Act. It was held that the surplus was a profit assessable to income-tax. It will be seen that the burial ground was managed on behalf of the Parish of Paddington and the surplus was applied for the benefit of the parishners. In the words of Day, J., it was a business carried on for the benefit of the rate-payers of the parish of Paddington. This case also, therefore, dealt with payments out of profits utilised for the benefit of those on whose behalf the business was companyducted. In Young M. Inspector of Taxes v. Racecourse Betting Control Board 1 the question that arose was whether the Racecourse Betting Control Board was entitled in companyputing the profits of the trade of totalisatot operator for the years 1953-54 and 1954-55 to deduct certain payments. The Board would be entitled, under the appropriate statutes, to deduct payment of moneys wholly and exclusively laid out or expended for the purpose of trade. It was held in that case that the said payments were all voluntary payments and were number made for the purpose of the trade. This decision has numberbearing on the question raised before us. The said decisions lead to the following results Income- tax is a tax on the real income, i.e., the profits arrived at on companymercial principles subject to the provisions of the Income-tax Act. The real profits can be ascertained only by making the permissible deductions. There is a clear-cut distinction between deductions made for ascertaining the profits and distributions made out of profits. In a given case whether the outgoings fall in one or the other of the heads is a question of fact to be found on the relevant circumstances, having regard to business principles. Another distinction that shall be borne in mind is that between the real and the statutory profits, i.e., between the companymercial profits and statutory profits. The latter are statutorily fixed for a specified purpose. If we bear in mind these two principles there will be numberdifficulty in answering the question raised. The appellant-company is a companymercial undertaking. It does business of the supply of electricity subject to the provisions of the Act. As a business companycern its real profit has to be ascertained on the principles of companymercial accountancy. As a licensee governed by the statute its clear profit is ascertained in terms of the statute and the schedule annexed thereto. The two profits are for different purposes--one is for companymercial and tax purposes and the other is for statutory purposes in order to maintain a reasonable level of rates. For the purposes of the Act, during the accounting years the assessee credited the said amounts to the Consumers Benefit Reserve Account. They were part of the excess amount paid to it and reserved to be returned to the companysumers. They did number form part of the asessees real profits. So, to arrive at the taxable income of the assessee from the business 1 1959 38 T.C. 452 H.L. . D 5SCI--14 under s. 10 1 of the Act, the said amounts have to be deducted from its total income. In this view it is number necessary to express our opinion on the question whether the said amounts would be allowable deductions under s. 10 2 xv of the Act. The next question is whether the amounts so reserved for future payment were deductible in companyputing the income, profits or gains from the assessees business for the assessment years 1953-54 and 1954-55. It is number disputed that the assessee adopts the mercantile system of accounting. The liability to return the amounts was incurred by the assessee during the relevant accounting years. This Court held in Calcutta Co. Ltd., v. Commissioner Income-tax, West Bengal 1 that where an assessee maintained his accounts on mercantile basis, the accrued liability and the estimated expenditure which it would incur in discharging the same companyld be deducted from the income of the accounting year in which the said liability accrued. Indeed, this legal position was number companytested on behalf of the Revenue. In the result we answer the question referred to the High Court in the affirmative and in favour of the assessee. The order of the High Court is set aside.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 211 of 1964. Appeal from the judgment and order dated February ,22, 1961 of the Bombay High Court in Miscellaneous Application No. 352 of 1959. Niren De, Additional Solicitor General, R. Ganapathy lyer and R.N. Sachthey, for the appellants. V. Viswanatha Sastri, T.A. Ramachandran, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, for the respondents. The Judgment of the Court was delivered by Sikri, J. This appeal is in pursuant to a certificate of fitness granted by the High Court of Maharashtra at Bombay under Art. 133 1 c of the Constitution is directed against the judgment of the said High Court in a petition under Art. 226 of the Constitution filed by the respondent. The India Fisheries P Ltd. hereinafter called the respondent was a private limited companypany and was directed to be wound up by an order of the Bombay High Court, dated October 11, 1950, and a Court Liquidator was appointed as the Official Liquidator thereof with all powers under s. 179 of the Indian Companies Act. 1913 VII of 1913 to be exercised by him under s. 180 without sanction or intervention of the Court save and except in case of sales of immovable property belonging to the respondent. For the assessment year 1948-49, the respondent was assessed on December 8. 1950, the tax being assessed at Rs. 8,737/15/-. On or about March 15. 1951, the Income Tax Officer lodged a claim in respect of this tax with the Official Liquidator. That claim was adjudged and allowed as an ordinary claim and certified as such on April 2 1952. in August, 1954, the Official Liquidator declared a dividend of 9 1/2 annas in a rupee and paid to the Income Tax Department a sum of Rs. 5,188/3/- against the claim made by the Income Tax Officer as an ordinary creditor. Thus a balance of Rs. 3,549/12 still remained payable to the Income Tax Department from the assets of the respondent. For the year 1955-56, the Department made a demand from the respondent on June 22, 1954, for a sum of Rs. 2,565/6/- as advance tax. This was paid by the Official Liquidator. On a regular assessment being made for the said year, only Rs. 1,1 26/12/was assessed as payable by the respondent. After adjusting this sum against the advance payment of Rs. 2,565/6/-, Rs. 1,460/1/became refundable to the respondent, inclusive of interest. Instead refunding the said balance to the respondent, the Income Tax Officer set off the said amount against the balance of Rs. 3,549/12/which was still outstanding in respect of the Income-tax demand for the year 1948-49. The respondent filed a revision petition to the Commissioner of Income-tax, but the said petition was rejected by the Commissioner on September 21. 1959. holding that the action of the Income Tax Officer was perfectly justified under the provision of s. 49E of the Income Tax Act. On November 25, 1959, the respondent filed a petition under art. 226 of the Constitution and prayed for a writ, direction or order for setting aside the orders of the Income Tax Officer and the Income Tax Commissioner. He further prayed for any further writ, direction or order restraining the Department from setting off the refund against the tax dues and directing them to hand over the balance to the Official Liquidator. The High Court held that the demand of Rs. 8.737/12/- in respect of the assessment year 1948-49. being adjudged and certified, came to have all the incidents and character of an unsecured debt payable by the Official Liquidator to the Department. The High Court observed that this claim thereafter was governed by the provisions of the Company law and companyld be paid to the creditor only in accordance with the provisions of the Company law. No other remedy number any other method of obtaining satisfaction of this claim was available to the creditor thereafter. It was numberlonger the amount of tax remaining payable by a person to whom the refund was due within the meaning of Section 49E of the Income Tax Act. In our opinion, therefore. the provision of Section 49E was number available to the Department for setting off the amount of the excess towards the balance of its claim of Rs. 8,737/15/- which the department had proved in the insolvency of the companypany and was being dealt with in the Insolvency. The High Court accordingly set aside the orders passed by the Department in so far as they set off the amount of the refund towards the tax remaining payable, and directed the Income Tax Officer to deal with and dispose of the claim of the present respondent for the refund and pass appropriate orders in respect of the said amount of refund under the provisions of s. 48 of the Income Tax Act. The learned Additional Solicitor-General on behalf of the appellant. companytends that s, 49E gives statutory power to the Income tax Officer. inter alia, to set off the amount to be refunded or any part of that amount against the tax remaining payable by the person to whom the refund is due, and this statutory power is number subject to any provision of any other law. He says that the Companies Act does number take away this power. Section 49E is in the following terms Where under any of the provisions of this Act, a refund is found to be due to any person, the Income-tax Officer, Appellate Assistant Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded, or any part of that amount against the tax, interest or penalty, if any, remaining payable by the person to whom the refund is due. On the face of this provision, there is numberdoubt that this section is number subject to any other provision of law. But it will be surprising if this power can be exercised in such a way as to defeat the provisions of the Indian Companies Act. It is number denied by the learned Additional Solicitor-General that the State has numberpriority in respect of this claim. The question then arises whether s. 49E is subject to the Insolvency Rules companytained in the Companies Act. Section 228 of the Companies Act, 1913, provides Debts of all descriptions to be proved.-- In every winding up subject in the case of insolvent companypanies to the application in accordance with the provisions of this Act of the law of insolvency all debts payable on a companytingency, and all claims against the companypany, present or future, certain or companytingent, shall be admissible to proof against the companypany, a just estimate being made, so far as possible, of the value of such debts or claims as may be subject to any companytingency or for some other reason do number bear a certain value. Section 229 provides Application of insolvency rules in winding up of insolvent companypanies.- In the winding up of an insolvent companypany the same rules shall prevail and be observed with regard to the respective rights of secured and unsecured creditors and to debate provable and to the valuation of annuities and future and companytingent liabilities as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent and all persons who in any such case, would be entitled to prove for and receive dividends out of the assets of the companypany may companye in under the winding up, and make such claims against the companypany as they respectively are entitled to by virtue of this section. The effect of these statutory provisions is, inter alia, that an unsecured creditor must prove his debts and all unsecured debts are to be paid pari passu. Therefore, once the claim of the Department has to be proved and is proved in the liquidation proceedings, the Department cannot by exercising the right under s. 49E of the Income Tax Act get priority over the other unsecured creditors. If we were to read s. 49E in the way suggested by the learned Additional Solicitor-General, it would be defeating the very object underlying ss. 228 and 229 of the Companies Act, 1913. If there is an apparent companyflict between two independant provisions of law, the special provision must prevail. Section 49E is a general provision applicable to all assessees and in all circumstances ss. 228 and 229-deal with the proof of debts and their payment in liquidation. In our opinion, s. 49E can be reconciled with ss. 228 and 229 by holding that s. 49E applies when insolvency rules do number apply. Accordingly, agreeing with the High Court, we hold that the Income Tax Officer was in error in applying s. 49E and setting off the refund due. The Commissioner was equally in error in affirming this order. The learned Additional Solicitor-General also urged that the application under art. 226 was misconceived because the Income Tax Officer had jurisdiction. But if we interpret s. 49E as we have done, it is a clear case of lack of jurisdiction. At any rate, there is an error apparent on the face of the orders and the High Court was quite right in exercising its jurisdiction under Art. 226.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 579 of 1961. Appeal from the judgment and decree dated September 25, 1957, of the Allahabad High Court in First Appeal No. 232 of 1942. Naunit Lai, for the appellant. T. Desai, Rameshwar Nath and S. N. Andley, for respon- dents Nos. 1 and 3. V. Goswami, for respondent Nos. 2 and 4. Murthy and B. P. Maheshwari, for respondent No. 5. The Judgment of the Court was delivered by Bachawat, J. One Kalyan Singh died sonless in the year 1918 leaving him surviving his widow, Mst. Bhagwati and two daughters., Mst. Indrawati and Mst. Radha Rani. By a deed, dated October 10, 1919, Mst. Bhagwati alienated her husbands estate in favour of certain alienees. On October 23, 1931, Mst. Indrawati suing in a representative capacity on behalf of the reversioners to the estate of Kalyan Singh, instituted the suit in the Court of the Additional Civil Judge of Mathura, out of which this appeal arises. impleading the alienees as also Mst. Bhagwati and Mst. Radha Rani as defendants and claiming a declaration that the alienation was null and void against the subsequent heirs of Kalyan Singh and that on the death of Mst. Bhagwati, his next heirs would be entitled to get possession of the alienated properties. On Angus 12, 1941, the trial Judge decreed the suit and granted a declaration that the alienation is void beyond the lifetime of Mst Bhagwati and does number bind the reversions, who would be entitled after the death of Mst. Bhagwati to possession over the assets of Babu Kalyan Singh. On February 12, 1942, some of the alienees preferred an appeal to the Allahabad High Court impleading Mst. Bhagwati, Mst. bidrawati and Mst. Radha Rani as respondents to the appeal. Three sons of Mst. Indrawati and two sons of Mst. Radha Rani were also impleaded as respondent Nos. 8 to 12, but by an order dated March 11, 1942, the High Court directed that those persons would number be allowed to be impleaded as respondents. During the pendency of the appeal in the High Court, Mst. Indrawati died. By an order, dated May 11, 1950, the High Court directed that Mst. Radha Rani would companytinue to be on the record in place of her deceased sister, Mst. Indrawati, and as the next reversioner to the estate of Kalyan Singh. During the pendency of the appeal, on June 17, 1956, the Hindu Succession Act. 1956 came into force. At the hearing of the appeal before the High Court, the alienees raised the preliminary companytention that after the companying into force of the Hindu Succession Act, 1956, there are numberreversioners and numberreversionary rights, and a suit for a declaration that the alienation is number binding on the reversioners is. numberlonger maintainable. The High Court accepted this companytention, allowed the appeal and dismissed the suit. the High Court did number go into the other questions raised in the appeal. On January 2, 1958, Mst. Radha Rani applied to the High Court for grant of a certificate under Art. 133 of the Constitution of India. On August 8, 1958, the High Court granted the certificate, and on February 27, 1959, the High Court declared the appeal admitted. On May 29, 1961, Mst. Bhagwati died. On or about November 13, 1961, the High Court despatched the records to this Court. No order of the High Court under O.XVI, r.12 a of the Supreme Court Rules substituting the heirs of Mst. Bhagwati in her place was obtained, and the appeal abated against her. On March 26, 1962, Mst. Radha Rani filed the petition of appeal in this Court. In this petition of appeal, Mst. Bhagwati and also the above-mentioned three sons of Mst. Indrawati and two sons of Mst. Radha Rani were impleaded as respondents. On August 24, 1964, respondents Nos. 1 to 3 filed Civil Miscellaneous Petition No. 2219 of 1964 raising certain preliminary objections, and praying that the appeal be dismissed. This petition was posted for hearing along with the appeal. On the merits, the respondents have very little to say. The High Court took the view that the effect of ss. 14, 15 and 16 of the Hindu Succession Act, 1956, was that after the companying into force of the Act, there are numberreversioners and numberreversionary rights. The Patna High Court in some of its earlier decisions took the same view, but other High Courts took the view that s. 14 did number apply to properties in the possession of alienees under an alienation made by the Hindu female before the Act came into force, and in respect of such properties, ss. 14, 15 and 16 of the Act did number abolish the reversioners and reversionary rights. In Gummalapura Taggina Mattada Kotturuswami v. Serta Veeravya and others 1 , this Court approved of the latter view, and this opinion was followed by this Court in Brahmadeo Singh and another v. Deomani Missir and others 2 . In the last case, the trial Court had decreed a suit by the reversioners for a declaration that two sale deeds executed by a Hindu widow were without legal necessity and number binding upon them. The Patna High Court allowed an appeal by the alienees and dismissed the suit holding that by reason of the provisions of s. 14 of the Hindu Succession Act, a suit by a reversioner for a declaration that an alienation made by a Hindu female is number binding on the reversioner is number maintainable. From the decision of the Patna High Court the reversioners preferred an appeal to this Court. This Court held that the view taken by the Patna High Court following its earlier decision in Ramsaroop Singh and others v. Hiralal Singh and others - and of the Allahabad High Court in Hanuman Prasad v. Indrawati 4 the decision under appeal in this case was incorrect, and S. 14 of the Hindu Succession Act, 1956 did number extend to property already alienated by a Hindu female. This Court accordingly allowed the appeal, and reversed the decree of the Patna High Court. The effect of this decision is that it is open to a reversioner to maintain a suit for a declaration that an alienation made by a Hindu female limited owner before the companying into force of the Hindu Succession Act., 1956, was without legal necessity and was number binding upon the reversioners. It follows that the High Court was in error in holding that the present suit was number maintainable since the companying into force of the Hindu Succession Act, 1956. But the companytesting respondents raise certain preliminary objections, and they companytend that the appeal should be dismissed. The first preliminary objection is that the three sons of Mst. Indrawati and the two sons of Mst. Radha Rani are improperly joined as respondents Nos. 8 to 12 in the petition of appeal. Respondents Nos. 8 to 12 were number parties to the appeal before the High Court, number was any order obtained permitting their joinder in the appeal to this Court. The companytesting respondents, therefore, pray that the names of respondents Nos. 8 to 12 be struck off from the record. The appellant does number object to this prayer. We direct accordingly that the names of respondents Nos. 8 to 12 be struck off from the record. 1 1959 Supp. I S.C.R. 968, 975-976. Civil Appeal No. 130 of 1960 decided on October 15, 1962. A.I.R. 1958 Patna 319 A.I.R. 1958 All. 304. The next preliminary objection is that the petition of appeal is a nullity as Mst. Bhagwait, a dead person was impleaded as a party respondent therein. As Mst. Bhagwati was dead on the date of the filing of the petition of appeal, she companyld number be shown as a respondent in this appeal. But the appeal may proceed against the other respondents on the footing that Mst. Bhagwati is number a party to the appeal. The next preliminary objection is that the appeal is defectively companystituted and is number maintainable in the absence of the heirs of Mst. Bhagwati. The heirs of Mst. Bhagwati are Mst. Radba Rani and the sons and daughters of Mst. Indrawati. The appellant did number obtain any order of Court substituting the heirs of Mst. Bhagwati in her place. Besides the three sons of Mst. Indrawati who are shown as respondents Nos. 10, 11 and 12 in the petition of appeal, Mst. Indrawati left another son, Lallu also known as Ram Prasad and two daughters, Ram Dulari and Vimla. Labu, Ram Dulari and Vimla are number parties to the appeal. Respondents Nos. 10, 11 and 12 were improperly added as parties in the petition of appeal and their names must be struck off. The result is that numbere of the sons and daughters of Mst. Indrawati are parties to the appeal. It follows that all the heirs of Mst. Bhagwati are number parties to the appeal, and the question is whether the appeal is defectively companystituted in their absence. In this companynection, it is necessary to companysider whether the heirs of the widow were necessary parties to a suit against the alienee either for a declaration that the alienation is void beyond her lifetime or for possession of the alienated property. In the case of an alienation by a Hindu widow, without legal necessity, the reversioners were number bound to institute a declaratory suit during the lifetime of the widow. They companyld wait until her death and then sue the alienee for possession of the alienated property treating the alienation as a nullity without the intervention of any Court. See Bijoy Gopal Mukherji v. Krishna Mahishi Debi 1 . To such a suit by the reversioners for possession of the property after the death of the widow, the heirs of the widow were number necessary parties. The reversioners companyld claim numberrelief against the heirs of the widow and companyld effectively obtain the relief claimed against the alienee in their absence. Instead of waiting until her death, the next reversioner as representing all the reversioners of the last full owner companyld institute a suit against the alienee for a declaration that the alienation was without legal necessity and was void beyond her lifetime. The widow was usually added as a party defendant to, 1 1907 I.L.R. 34 Cal. 329, 333 P.C. such a suit. The widow was certainly a proper party, but was she a necessary party to such a suit ? On behalf of the appellant it is suggested that the widow is number a necessary party to the suit, and in this companynection, reference is made to Illustration e to S. 42 of the Specific Relief Act, 1877. For the purposes of this appeal, it is number necessary to decide this broad question it is sufficient to say that in the case of the death of the widow during the pendency of the declaratory suit, the heirs of the widow are number necessary parties to the suit. Though the widow was joined as a party to the suit, numberrelief was claimed against her personally. On the death of the widow, the entire estate of the last full owner is represented by the plaintiff suing in a representative capacity on behalf of all the reversioners, and the plaintiff can get effective relief against the alienee in the absence of the heirs of the widow. In view of the fact that on the death of the widow, the reversioners become entitled to possession of the property, in a proper case leave may be obtained to amend the plaint in the declaratory suit by ,adding all the reversioners as plaintiffs and by including in the plaint a prayer for possession of the property. If the plaint were amended and the suit were companyverted into one for possession of the property, clearly the heirs of the widow would number be necessary parties to the suit. The fact that the plaint is number amended makes number-difference. The plaintiff is entitled to companytinue the declaratory suit without joining the heirs of the widow as parties to the suit. As the reversioners were number entitled to the possession of the property at the time of the institution of the suit, the next reversioner companyld then sue for a bare declaration and the proviso to S. 42 of the Specific Relief Act, 1877 did number companystitute a bar to the suit. The declaratory suit does number become defective because during the pendency of the suit, the reversioners become entitled to further relief. The next reversioner is entitled to companytinue the declaratory suit but in the absence of an amendment of the plaint, a decree for possession of the property cannot be passed in the suit, and if the reversioners are to get any real benefit, they must institute a suit for possession of the property within the period of limitation. Had Mst. Bhagwati died during the pendency of the suit, her heirs would number have been necessary parties to the suit. The position is number altered because the suit has been dismissed on appeal by a decree of the High Court, and during the pendency ,of the further appeal to this Court, Mst. Bhagwati died, and the -appeal against her has abated. The appeal against the surviving respondents has number abated, and we think that the appeal is number defectively companystituted in the absence of the heirs of Mst. Bhagwati. In the appeal to this Court, Mst. Radha Rani asks for the identical relief which the original plaintiff sought in the suit. She can get effective relief in the appeal in the absence of the heirs of Mst. Bhagwati just as the original plaintiff companyld obtain the relief in the suit in their absence. The fact that the suit was dismissed by the High Court in the presence of Mst. Bhagwati makes numberdifference. In the suit, the plaintiff asked for the necessary relief against the alienees Mst. Bhagwati was joined as a party to the suit, but numberrelief was claimed against her personally. The High Court dismissed the suit against the alienees. The appellant to this Court number seeks for a reversal of the High Court decree in the presence of the alienees. The reversal of the High Court decree in the absence of the heirs of Mst. Bhagwati would number lead to the passing of inconsistent and companytradictory decrees. The High Court did number pass any decree in favour of Mst. Bhagwati. The success of this appeal cannot lead to the passing of a decree by this Court in companyflict with any decree passed by the High Court in favour of Mst. Bhagwati. The cause of appeal in this Court survives against the surviving respondents, and the appeal can proceed to a final adjudication in the absence of the heirs of Mst. Bhagwati. We hold that the appeal is number defective on account of the number-joinder of necessary parties. Civil Miscellaneous Petition No. 2219 of 1964 is dismissed, save that we direct that the names of respondents Nos. 8 to 12 be struck off from the record. In the result, the appeal is allowed, tile judgment and decree, dated September 25, 1957, of the High Court are set aside, and First Appeal No. 232 of 1942 must number be heard on the merit.-, by the High Court.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeals Nos. 209 of 1962 and 3 of 1963. Appeals by special leave from the judgment and order dated August 30, 1962, of the Patna High Court in Government Appeal No. 33 of 1959 and Cr. Appeal No. 392 of 1959 respectively. P. Varma, for the appellants in Cr. A. No. 209 of 62 . K. Sinha, for the appellants in Cr. A. No. 3 of 1963 . P. Singh, for the respondent in both the appeals . The Judgment of the Court was delivered by Hidayatullah J. In these two appeals by nine persons, who, have been companyvicted under s. 302/1149, Indian Penal Code, special. leave is limited to one question of law, namely, whether the accused companyld be legally companyvicted under the above sections when they were number charged and companyvicted under S. 147 or s. 148 of the Indian Penal Code ? It appears from the judgment under appeal that there was a difference of opinion on this point in the High Court at Patna and the appeals in the High Court were disposed of by a Full Bench which held that charges under ss. 147 and 148 were number necessary before companyviction under s. 302, Indian Penal Code companyld be made with the aid of s. 149, Indian Penal Code. In view of the limited nature of the appeals only the essential facts may be stated. The person who lost As life was one Misari who was related to some of the accused persons. In the past there were other incidents. In 1955 one Ajablal was murdered and some of the present accused were prosecuted but were acquitted. Subsequently, one Baldeo Sharma was murdered and some of the prosecution witnesses in this case were charged with that offence. At the time of the judgment under appeal August 30, 1962 an appeal was pending in the Patna High Court against the companyviction of the accused in that case. The present occurrence took place on April 24, 1958. The prosecution case is that Misari was going in the morning to call laborers when he was attacked by the appellants with diverse weapons. He died as a result of his injuries and a case was registered under s. 302, Indian Penal Code. The appellants were charged at the trial alternatively under s. 302/149 and 302 /34, Indian Penal Code. The Additional Sessions Judge, Monahyr companyvicted three of the appellant,-, on both the charges, sentencing them to imprisonment for life on the first charge only. The remaining accused were acquitted. Appeals by those who were companyvicted and by the State Government against the acquittal of the others were heard together and were disposed of by the companymon judgment number under appeal. The appeal of the State Government was allowed and that of the three companyvicted accused was dismissed. As a result all the original accused were companyvicted under s. 302/1.49, Indian Penal Code and were sentenced to imprisonment for life. During the hearing of the appeals a point was raised by the State companynsel in the appeal by the State that the trial was bad inasmuch as numbercharge under S. 147 or s. 148 had been framed. The Divisional Bench thinking that the point might only menaces the public peace or actually disturbs it. The scheme of the Chapter may number be examined. Section 141 defines an unlawful assembly as an assembly of five or more persons the companymon object of which is inter alia to companymit an offence. There are five clauses which describe the many kinds of companymon objects which render an assembly unlawful. These clauses need number be reproduced here for numberhing turns on them in ,he present case. Here we are companycerned with the offence of murder and according to the charge the companymon object of the accused who had formed themselves into an assembly was to companymit the murder of Misari. This companymon object has been held proved and there can thus be numberquestion that this was an unlawful assembly. Continuing again with the scheme of the Chapter, we next see that s. 142 says that a person is companysidered to be a member of an unlawful assembly, if, being aware of facts which render any assembly an unlawful assembly be intentionally joins that assembly or companytinues in it. A mere membership of an unlawful assembly is punishable under S. 143. Under the next section heavier punishment is awardable to a person who joins an unlawful assembly armed with a deadly weapon or with anything which used as a weapon of offence is likely to cause death. Section 145 next provides for a similar higher punishment for a person who joins or companytinues in an unlawful assembly knowing that it has been ordered to disperse. These sections make mem- bership as such of an unlawful assembly punishable, though in varying degrees. Section 146 then defines the offence of rioting. This offence is said to be companymitted when the unlawful assembly or any member thereof in prosecution of the companymon object of such assembly uses force or violence. It may be numbericed here that every member of the unlawful assembly is guilty of the offence of rioting even though be may number have himself used force or violence. There is thus vicarious responsibility when force or violence is used in prosecution of the companymon object of the unlawful assembly. The next two sections prescribe punishment for the offence of rioting. Section 147 punishes simple rioting. Section 148 punishes more severely a person who companymits the offence of rioting, armed with a deadly weapon but the section makes only a person who is so armed liable to higher punishment. Section 149 then creates vicarious responsibility for other offenses besides rioting. The section provides as follows Every member of unlawful assembly guilty of offence companymitted in prosecution of companymon object. If an offence is companymitted by any member of an unlawful assembly in prosecution of the companymon object of that assembly, or such as the members of that assembly knew to be likely to be companymitted in prosecution of that object, every person who, at the time of the companymitting of that offence, is a member of the same assembly, is guilty of that offence. For the application of the section there must be an unlawful assembly. Then if an offence is companymitted in prosecution of the companymon object of that assembly or is such as the members of the unlawful assembly know to be likely to be companymitted then whoever is member of that assembly at the time the offence is companymitted is guilty. The remaining sections do number help in the present discussion. This being the scheme, is it obligatory to charge a person under s. 147 or s. 148 before s. 149 can be utilized ? Section 149 does number state this to be a companydition precedent for its own application. No other section prescribes this procedure. Sections 146 and 149 represent companyditions under which vicarious liability arises for the acts of others. If force or violence is used by a member in the prosecution of the companymon object of the, unlawful assembly every member of the assembly is rendered guilty of the offence of rioting and is punishable for that offence under s. 147. The offence of rioting must of companyrse, occur when members are charged with murder as the companymon object of the unlawful assembly. Section 148 creates liability on persons armed with de-Idly weapons and it is a distinct offence. It need number detain us. If a person is number charged under s. 147 it does number mean that s. 149 cannot be used. When an offence such as murder is companymitted in prosecution of the companymon object of the unlawful assembly or the offence is one which the members of the assembly knew to be likely to be companymitted in prosecution of the companymon object, individual responsibility is replaced by vicarious responsibility and every person who is a member of the unlawful assembly at the time of the companymitting of the offence becomes guilty. It is number obligatory to charge a person under s. 143, or s. 144 when charging him with S. 147 or s. 148. Similarly, it is number obligatory to charge a person under s. 143 or s. 147 when charging him for an offence with the aid of s. 149. These sections are implied. It may be useful to add a charge under s. 147 and 148 with charges under other offenses of the Penal, Code read with s. 149. but it is number obligatory to do so. A person may join an unlawful assembly and be guilty under s. 143 or 147 or 148 but he may cease to be its member at the time when the offence under s. 302 or some other offence is companymitted. He would number in that event be liable for the other offence for S. 149 would number apply to him. The present case is number of that kind. The fallacy in the cases which hold that a charge under s. 147 is companypulsory arises because they overlook that the ingredients of s. 143 are implied in s. 147 and the ingredients of s. 147 are implied when a charge under s. 149 is included. An examination of s. 141 shows that the companymon object which renders an assembly unlawful may involve the use of criminal force or show of criminal force, the companymission of mischief or criminal trespass or other offence, or resistance to the execution of any law or of any legal process. Offenses under ss. 143 and 147 must always he present when the charge is laid for an offence like murder with the aid of s. 149, but the other two charges need number be framed -separately unless it is sought to secure a companyviction under them. It is thus that s. 143 is number used when the charge is under S. 147 or s. 148, and s. 147 is number used when the charge is under S. 148. Section 147 may be dispensed with when the charge is under s. 149 read with an offence under the Indian Penal Code. The charges that are framed against the appellants and which we have reproduced earlier, companytain all the necessary ingredients to bring home to each member of the unlawful assembly the offence of murder with the aid of s. 149. The prosecution has proved the existence of an unlawful assembly, its companymon object which was murder of Misari and the member-,hip of each of the appellants. Nothing more was necessary. of companyrse, if a charge bad been framed under S. 147 or 148 and that charge had failed against any of the accused then s. 149 companyld number have been used against him. The area which is companymon to ss. 147 and 149 is the substratum on which different degrees of liability are built and there cannot be a companyviction with the aid of s. 149 when there is numberevidence of such substratum. It is quite a different thing to say that to lay down this substratum one must frame first a charge under s. 143, then a charge under s. 147 and then a charge under s. 149. The last named section is number dependent on the other.-, because the others are implied in circumstances in which s. 149 is used. There can be proof under s. 1.49 of the existence of an unlawful assembly, of the companymon object and of the part -played by the unlawful assembly or any of its members, same as under s. 143 or S. 147 or s. 148. There may be additional charges under these sections to guard against failure of the charge for an offence read with s. 149 but the other charges cannot be regarded as companydition precedent. We agree with the companyclusion of the Full Bench and therefore companyfirm the judgment under appeal.

Case appeal was rejected by the Supreme Court

Shah, J. The 1st Income-tax Officer, C-II Ward, Bombay, served a numberice under section 18A 1 of the Indian Income-tax Act, 1922, calling upon Bhagwandas Kevaldas - who will hereinafter be called the assessee to pay in four equal installments Rs. 25,973-5-0 as advance tax for the assessment year 1948-49. On September 17,1947, the assessee filed an estimate of his income under section 18A 2 and of the tax payable by him, and on January 10, 1948, he filed a revised estimate. An order under section 23B of the Act provisionally assessing the income was made by the Income-tax Officer and pursuant thereto on August 23, 1950, the assessee paid the tax so assessed. Regular assessment of the income was made on March 31, 1953, by the Income-tax Officer, and it was found that the tax paid on the basis of the estimate of the assessee was less than eighty per cent of tax determined as a result of the regular assessment. But the Income-tax Officer made numbercharged for interest under sub-section 6 of S. 18-A of the Income-tax Act. The departmental auditor raised an objection in auditing accounts of C-II Ward that a mistake was companymitted by the Income-tax Officer in failing to charge interest in making the order of assessment against the assessee. On September 21, 1956, the Income-tax Officer served a numberice upon the assessee requiring him to show cause why the mistake in number levying interest be number rectified and why he should number directed to pay penal interest under section 18A 6 . On October 4, 1956, the Income-tax Officer recorded the following order During the internal checking of C-II Ward, the auditor has pointed out a mistake is apparent from record the same is rectified under section 35 after giving due numberice to the assessee. and served a numberice of demand calling upon the assessee to pay Rs. 14,929-10-0 as interest due under section 18A 6 for the period January 1, 1948, to July 22, 1950. In exercise of his powers under section 33A, by order dated February 1, 1958, the Commissioner of Income-tax companyfirmed the order of the Income-tax Officer rectifying the original order of assessment and imposing liability to pay interest, subject to the modification that interest be paid only till June 13, 1950. The assessee then moved the High Court of Judicature at Bombay by a petition under article 226 of the Constitution for issue of a writ of certiorari summoning the record of the case and for an order quashing or setting aside the order passed under section 33A 2 by the Commissioner of Income-tax and the order passed by the Income-tax Officer under section 35 and the numberice of demand pursuant to that order. The High Court of Bombay, following its earlier judgment in the case of Shantilal Rawji v. M. C. Nair, IV Income-tax Officer, E Ward Bombay, directed that the orders passed by the Income-tax Officer and by the Commissioner of Income-tax be quashed. Against the order passed by the High Court the Commissioner of Income-tax and the Income-tax Officer have, with certificate granted by the High Court, appealed to this companyrt. At the hearing of this appeal companynsel for the assessee raised an objection in limine that the appeal filed by the Commissioner and the Income-tax Officer was incompetent, because the High Court had numberpower under article 133 of the Constitution to certify a proposed appeal against an order in a proceeding companymenced by a petition for the issue of a writ under article 226 of the Constitution. It was urged that the proceeding before the High Court was number a civil proceeding within the meaning of article 133. Article 133 of the Constitution, in so far as it is material, by the first clause provides An appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court in the territory of India if the High Court certifies - a that the amount or value of the subject-matter of the dispute in the companyrt of first instance and still in dispute on appeal was and is number less than twenty thousand rupees or b that the judgment, decree or final order involves directly or indirectly some claim or question respecting property of the like amount or value or c that the case is a fit one for appeal to the Supreme Court The power to issue a certificate under article 133 may be exercised only in respect of a judgment, decree or final order of a High Court in a civil proceeding, and the order passed by the High Court disposing of the petition filed by the assessee for the issue of a writ under article 226 is a judgment. But Mr. A. V. Viswanatha Sastri for the assessee companytended in the first instance that the expression civil proceeding in article 133 only means a proceeding in the nature of or triable as a civil suit and a petition for the issue of a high prerogative writ number being such a proceeding, against the order passed by the High Court numberappeal lay to this companyrt with certificate under article 133. In the alternative, companynsel companytended that even if a proceeding for the issue of a writ under article 226 of the Constitution may in certain cases be treated as a civil proceeding, it cannot be so treated when the party aggrieved seeks relief against the levy of tax or revenue claimed to be due to the State. This companyrt is invested by the Constitution with appellate jurisdiction of great amplitude exercisable over all companyrts and tribunals in India. The jurisdiction may be exercise in respect of any judgment, decree, determination sentence or order in any cause or matter passed by any companyrt or tribunal other than a judgment, determination, sentence or order made or passed by any companyrt or tribunal under any law relating to the Armed Forces article 136. Exercise of this power depends solely upon the discretion of the companyrt. Appeals lie to this companyrt from orders passed in certain classes of cases when certified by the High Courts. An appeal lies from the judgment, decree or final order of a High Court in a civil, criminal or other proceeding, if the High Court certifies that the case involves a substantial question of law as to the interpretation of the Constitution article 132 1 . An appeal also lies form any judgment, decree or final order in a civil proceeding of a High Court if the High Court certifies that the case satisfies the companyditions in cl. a , b or c of Art. 133 1 , or from any judgment or final order or sentence in a criminal proceeding of a High Court, if the case falls within the description of cls. a and b of Art. 134, or if the High Court certifies that the case is a fit one for appeal. It is clear that under Art. 136 against the adjudications of all companyrts and tribunals subject to the exception already numbericed whatever be the character of the proceeding, appeals lie with leave to this Court. An appeal lies against the adjudication of a High Court as a matter of right, whatever the nature of the proceeding, with certificate that it involves a substantial question of law as to the interpretation of the Constitution, and in civil proceeding with certificate of the nature set out in cls. a , b or c of Art. 133, and in criminal proceedings in company ditions mentioned in cls. a and b ard with certificate under cl. c of Art. 134. Counsel for the assessee said that proceedings instituted in the High Court in exercise of its jurisdiction - original or appellate - may be broadly classified as i proceedings civil, ii proceedings criminal, and iii proceedings revenue, and where the case does number involve a substantial question as to the interpretation of the Constitution, from an order passed in a proceeding civil an appeal lies to this companyrt with certificate granted under article 133 of the Constitution, and from a judgment, final order or sentence in a criminal proceeding an appeal lies with certificate granted under article 134 of the Constitution, but from an order passed in a proceeding relating to revenue the right of appeal may be exercised only with leave of this companyrt. Counsel seeks support for this argument primarily from the phraseology used in article 132 of the Constitution. That article, by its first clause, provides An appeal shall lie to the Supreme Court from any judgment, decree or final order of a High Court in the territory of India, whether in a civil, criminal or other proceeding, if the High Court certifies that the case involves a substantial question of law as to the interpretation of this Constitution. Counsel relies upon the classification or proceeding made in article 132 1 and seeks to companytrast it with the phraseology used in article 133 1 and 134 1 . He says that other proceeding in article 132 1 falls within the residuary class of proceedings other than civil or criminal, and such a proceeding includes a revenue proceeding. The expression civil or criminal, and such a proceeding includes a revenue proceeding. The expression civil proceeding is number defined in the Constitution, number in the General Clauses Act. The expression our judgment companyers all proceedings in which a party assets the existence of a civil right companyferred by the civil law or by statue, and claims relief for breach thereof. A criminal proceeding on the other hand is ordinarily one in which if carried to its companyclusion it may result in the imposition of sentences such as death, imprisonment, fine or forfeiture of property. It also includes proceedings in which in the larger interest of the State, orders to prevent apprehended breach of the peace, orders to bind down persons who are a danger to the maintenance of peace and order, or orders aimed at preventing vagrancy are companytemplated to be passed. But the whole area of proceedings, which reach the High Courts is number exhausted by classifying the proceedings as civil and criminal. There are certain proceedings which may be regarded as neither civil number original. For instance, proceeding for companytempt of Court, and for exercise of disciplinary jurisdiction against lawyers or other professional,such as Chartered Accountants may number fall within the classification of proceedings, civil or criminal. But there is numberwarrant for the view that from the category of civil proceedings, it was intended to exclude proceedings relating to or which seek relief against enforcement of taxation laws of the State. The primary object of a taxation statute is to companylect revenue for the governance of the State or for providing specific services and such laws directly affect the civil rights of the tax-payer. If a person is called upon to pay tax which the State is number companypetent to levy, or which is number imposed in accordance with the law which permits imposition of the tax, or in the levy, assessment and companylection of which rights of the tax-payer are infringed in a manner number warranted by the statute, a proceeding to obtain relief whether it is from the tribunal set up by the taxing statute, or from the civil companyrt would be regarded as a civil proceeding. The character of the proceeding, in our judgment, depends number upon the nature of the tribunal which is invested with au thority to grant relief, but upon the nature ot the right violated and the appropriate relief which may be claimed. A civil proceeding is there fore one in which a person seeks to enforce by appropriate relief the alleged infringement of his civil rights against another person or the State, and which if the claim is proved would result in the declaration express or implied of the right claimed and relief such as payment of debt, damages, companypensation, deliver of specific property, enforcement of personal rights, determination of status etc. There is therefore under the Constitution a right of appeal to this companyrt with special leave from the adjudications of all companyrts and tribunals except tribunals companystituted by or under law relating to Armed Forces . An appeal also lies to this companyrt against all adjudications by a High Court from judgments, decrees and orders in cases in which a substantial question as to the interpretation of the Constitution is involved, whatever the nature of the proceeding. Appeals from criminal proceedings lie as a matter of right in cases falling within clauses a and b of article 134, and from civil proceedings of the nature certified by the High Court under article 133 1 , clause a , b or c . For reasons already stated, a proceeding for relief against infringement of civil right of a person is a civil proceeding even if the infringement be incorporated enforcement of a taxing statue. Section 261 of the Income-tax Act, 1961, under which an applied to this companyrt from any judgment delivered on a reference made under section 256 in any case which the High Court certifies to be a fit one for appeal to this companyrt is number an exception to that rule. It is number because the reference is number a civil proceeding that a certificate under article 133 may number be granted it is because of the advisory character of the jurisdiction exercised by the High Court under section 256 is number a judgment, order or decree within the meaning of article 133. Similarly, the enactment of section 54 of the Land Acquisition Act which expressly provides for an appeal to this companyrt subject to the provisions companytained in section 110 of the Code of Civil Procedure, from an award, or from any part of the award made by the companyrt is easily appreciated, it regard be had to the character of .the adjudication, which is in the nature of an award in an arbitration see Rangoon Botatoung Co. Ltd. v. The Collector, Rangoon, 39 Ind App 197 PC . By a petition for writ under article 226 of the Constitution, extraordinary jurisdiction of the High Court to issue high prerogative writs granting relief in special cases to persons aggrieved by the exercise of authority statutory to otherwise by public officer or authorities is invoked. This jurisdiction is undoubtedly special and exclusive, but on that account the nature of the proceeding in which it is exercised is number altered. Where a revenue authority seeks to levy tax or threatens action in purported exercise of powers companyferred by an Act relating to revenue, the primary impact of such an act or threat is on the civil rights of the party aggrieved and when relief is claimed in that behalf it is a civil proceeding, even if relief is claimed number in a suit but by resort to the extraordinary jurisdiction of the High Court to issue writs. It is number easy to attribute to the expression revenue proceeding any precise companynotation, and in interpreting articles 132 1 and 133 it would be difficult to project the somewhat anomalous provision companytained in section 226 of the Government of India Act, 1935, under which for historical reasons, it was enacted that unless otherwise provided by the appropriate legislature, numberHigh Court shall have any act ordered or done in the companylection thereof according to the usage and practice of the companyntry or the law for the time being in force. This section barred the High Court from exercising original jurisdiction in matters companycerning revenue. There was numbersuch bar against subordinate companyrts, number against the exercise of appellate jurisdiction by the High Court in matters companycerning revenue instituted in subordinate companyrts. No provision has been made in the companystitution similar to section 226 of the Government of India Act, and there is numberreason to think that it was intended to deprive the High Court of its power to certify cases companycerning revenue, by enacting that the High Court may certify a case in a civil proceeding. No ground is suggested for acceptance that while removing the ban against the High Court s original jurisdiction in matters companycerning revenue, the Constitution imposed another ban against the exercise of power to certify cases decided by the High Court in the appellate as well as original jurisdiction when the cases companycerned revenue. We have already set out our reason for holding that a proceeding taken for recovery of tax is number other proceeding under article 132 1 such a proceedings is a civil proceeding with the meaning of article 132 1 . The object of referring to other proceeding in that clause is merely to emphasize that adjudications made in proceedings which are number included in the description civil or criminal would still attract the provisions of article 132 1 in case they raise a substantial question of law as to the interpretation of the Constitution. A proceeding in which relief is claimed against action of revenue authorities is included in the civil proceeding and number in other proceeding within the meaning of article 132 1 , and an aggrieved partys right to appeal to his companyrt from orders in those proceedings is exercisable in the same manner as it would be in the case of a decree, order or judgment in any other civil proceeding. A large number of cases have arisen before the High Courts in India in which companyflicting views about the meaning of the expression civil proceeding were expressed. In some cases it was held that the expression civil proceeding excludes a proceeding instituted in the High Court for the issue of a writ whatever may be the nature of the right infringed and the relief claimed in other cases it has been held that a proceeding resulting from an application for a writ under it has been held that a proceeding resulting from an application for a writ under article 226 of the Constitution may in certain cases be deemed to be a civil proceeding if the claim made, the right infringed and the relief sought warrant that inference in still another set of cases it has been held that even if a proceeding companymenced by a petition for a writ be generally categorised as a civil proceeding where the jurisdiction which the High Court exercises relates to revenue, the proceeding is number civil. A persual of the reasons given fin the cases prompt the following observations There are two preliminary companyditions to the exercise of the power to grant certificate a there must be a judgment, decree or final order, and that judgment, decree or final order must be made in a civil proceeding An advisory opinion in a tax reference may number be appealed from with certificate under Art. 133, because the opinion is number a judgment, decree or final order, and b a proceeding does number cease to be civil, when relief is claimed for enforcement of civil rights merely because the proceeding is number tried as a civil suit. In a large majority of the cases in which the jurisdiction of the High Court to certify a case under Art. 133 1 was negatives it appears to have been assumed that the expression other proceeding used in Article 132 of the Constitution is or includes a proceeding of the nature of a revenue proceeding, and therefore the expression civil proceeding in Art. 133 1 does number include a revenue proceeding. This assumption for reasons already set Out is erroneous. We do number think that any useful purpose will be served by entering upon a detailed analysis of the cases to which our attention was invited in which the view has been expressed that in a petition under article 226 of the Constitution where reliefs is claimed in respect of action sought to be taken by the revenue authorities, the High Court has numberpower to issue a certificate under article 133 of the Constitution. Express prescription of two independent companyditions by the Constitution on the existence of which alone the jurisdiction of the High Court may be invoked, has in some cases been obliterated, and the ground that from an order in a reference in a case companycerning revenue for opinion, a certificate may number be granted under article 133, because there is numberjudgment, decree or final order has been projected into a ground for denying that proceeding the character of a civil proceeding. On a careful review of the provisions of the Constitution, we are of the opinion that there is numberground for restricting the expression civil proceeding only to those proceedings which arise out of civil suits or proceedings which are tried as civil suits, number is there any rational basis for excluding from its purview proceedings instituted and tried in the High Court in exercise of its jurisdiction under article 226, where the aggrieved party seeks relief against infringement civil rights by authorities purporting to act in exercise of the powers companyferred upon them by revenue statues. The preliminary objection raised by companynsel for the assessee must therefore fail. We may number turn to the question which is raised on the merits in this appeal. Section 18A which was added by the Indian Income-tax Amendment Act II of 1944, for imposing liability for advance payment of tax enacts by the first sub-section, in so far as it is material, that where there is numberprovision made for deduction of income-tax at the time of payment, the Income-tax Officer may or after the companymencement of any financial year, by order in writing, require an assessee to pay quarterly to the credit of the Central Government the income-tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed. Contrary to the two basic companycepts of the scheme of the Indian Income-tax Act under which tax is charged upon the income of the previous year and number the income of the assessment year and liability does number arise until the annual Finance Act is passed charging income to tax, section 18A introduces within the scheme of the Act the principle of advance payment of tax and authoresses pollection of advance tax before the assessment year, company minces and before even the. Finance Act which imposes liability is enacted. But this tax is ad Vance tax which is to be adjusted against tax-payable on the income of the financial year in the light of the total income which may be company putted and also in the light of the Finance Act which may be passed. Assessment and demand for advance payment of tax are therefore provisional. If ultimately the advance tax paid is in excess of the tax finally assessed, refund will be granted to the assesses if the advance tax-paid is less than what is payable, the balance because payable on the final assessment. With the object of enforcing companypliance with the provision for payment of advance tax effectively, and at the same time to protect the assesses from avoidable harassment, the Legislature made a provision under sub-s, 2 of, S. 18-A enabling the assesses before the last instilment is due to intimate his own estimate of the income, of the previous year to the Income-tax-Officer and the tax payable by him calculated in the manner laid down in sub-s. 1 and to pay such amount as accords with his estimate. Provision is also made for submitting revised estimate of income. The Legislature by sub-s. 6 also on the other hand penalizes an assesses who seeks to evade liability to pay advance tax by underestimating his income by providing that if in any year an assesses paid tax under sub-s. 2 or 3 on the basis of his own estimate and the tax so paid is less than eighty per cent of the tax determined on the basis of the regular assessment, so far as such tax relates to income to which the provisions of S. 18 do number apply and so far as it is number due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of six per cent per annum from the 1st day of January in the financial year in which the tax was paid up to the date of the said regular assessment shall he payable by the assesses upon the amount by which the tax so paid falls short of the said eighty per cent. Sub-section 6 as originally enacted left numberdiscretion to the Income-tax Officer if the estimate fell below the prescribed limit, the Income-tax Officer was obliged to direct payment of interest. But by Act 25 of 1953 which was enacted with retrospective operation from April 1, 1952, the following proviso was added as the fifth provision to S. 18-A 6 . Provided further that in such case and under such circumstances as may be prescribed the Income-tax Officer may reduce or waive the interest payable by the assessee. The amendment authorised the Income-tax Officer to reduce or waive the interest payable by the assessee in such cases and under such circumstances as may be prescribed. It was given retrospective operation from April 1, 1952, and the discretion companyferred upon the Income-tax Officer became, by fiction of law, exercisable as from April 1, 1952, even though the Act came into force from the discretion was to be exercised were prescribed by the Central Government by rule 48 in December, 1953. The Income-tax Officer in present case, on the language used in the stature as it stood on the date of making the order of assessment was bound to impose liability for payment of interest under sub-section 6 . But for some reason which cannot be ascertained from the record he did number impose that liability. It was only when in the companyrse of audit this lacuna was pointed out that the Income-tax Officer companymenced proceeding under section 35 of the Income-tax Act for rectification of the order of assessment. There was at the date of the original assessment an absolute obligation imposed upon the assessee to pay interest under section 18A 6 , but by reason of the retrospective given to the fifth proviso added to sub-section 6 by Act 25 of 1953, the Income-tax Officer was invested with the discretion to reduce or waive interest payable by the assessee, this power the Income-tax Officer must, in view of the retrospective amendment, be deemed in law to have possessed on the date on which the order of assessment was made in tins case. The Attorney-General appearing on behalf of the Commissioner companytended that to the fifth proviso to section 18A 6 numberretrospective operation companyld effectively be given, because the rules, which alone companyld render the discretion operative, were framed for the first time in December, 1953. We are unable to agree with that view. The legislature has expressly given operation to the fifth proviso to section 18A 6 , from April 1, 1952. It is true that the proviso operates only in respect of cases and under circumstances as may be prescribed, but as soon as rules were framed, which effectuate the purposes for which the proviso was enacted, the proviso and the rules became effective retrospectively from April 1, 1952. Mr. Sastri appearing on behalf of the assessee companytended that this companyrt has laid down in T. Cajee v. U. Jormanik Siem that where power is companyferred upon an authority and it is made exercisable in the manner provided by subsidiary legislative, failure top enact such subsidiary legislation will number defeat the power the power will be exercisable without the restrictions which may be, but are number imposed, and therefore once the power of the Income-tax Officer came into being that power became exercisable immediately without restrictions or limitations until the Central Government chose to frame rules defining those restrictions. We do number think that the case to frame rules defining those restrictions. We do number think that the case cited by companynsel for the assessee has any application. That was a case in which a District Council was companystituted for the Jaintia. Hill District under the Sixth Schedule to the Constitution. Under the Sixth Schedule, the District Council was empowered to make laws, inter alia, for administration of the District, and appoint ment or succession of chiefs or Headmen, but the District Council made numberrules regulating the appointment and succession of chiefs and Headmen. It was held by this Court that the District Council being an administrative and le gislative body, it companyld, so long as numberlaw was made, exercise its administrative powers to determine the appointment of Chiefs or Head- men. After the law was made, the administrative powers companyld be exercised subject to the law. The case has numberapplication to the present case. The Sixth Schedule vested in the District Council a general administrative power which was capable of being restricted by law, but until so restricted the power was absolute. In the case before us, however, the discretion to re duce or waive interest can only be exercised in cases and under circumstances to be prescribed. There was numberabsolute power with which the Income-tax Officer was invested to reduce or waive interest his power companyld be exercised only in prescribed cases within the limits of the authority companyferred upon him. He companyld number reduce or waive interest except in cases and in circumstances prescribed. But once the rules are framed, they by reason of the retrospective operation of Act 25 of 1953 become operative as from the date on which the Apt has become . operative. This companyrt in M. K. Venkatachalam v, Bombay Dyeing and Manufacturing Co. Ltd. held in dealing with the case arising under the second proviso to section 18A 5 which was also inserted by Act 25 of 1953 with retrospective operation from April 1, 1952 that the Income-tax Officer has power under section 35 of the Act to rectify a mistake in the assessment, even though the mistake was the result of a legal fiction arising from the retrospective operations given to the amending Act. In Venkatachalams case on October 9, 1952, the Income- tax Officer assessed the taxpayer for the assessment year 1952-53 and gave him credit from certain amount as representing interest on tax paid in advance under section 18A 5 . Thereafter, on May 24,1953, the Indian Income Tax Amendment Act 25 of 1953 came into force which added a proviso to section 18A 5 that the assessee was entitled to interest number on the whole of the advance tax paid by him, but only on the difference between the payment made and the amount assessed. This e face of the order. In the present case the position is reversed, but on that account the principles is number nay the less applicable. By virtue of the retrospective amendment in section 18A 6 the order which was made by the Income-tax Officer on the date of assessment and which was plainly inconsistent with the terms of the section as it then stood became one which he was companypetent to pass in exercise of his power. The Attorney-General companytended that in any event there was numberhing to show that the Income-tax Officer had purported to exercise his discretion when he passed the order of assessment and did number impose any liability for payment of interest under section 18A 6 . That may be so. But the case of the assessee did fall within the terms of rule 48 1 and the Income-tax Officer must in law be bound to companysider whether he was entitled to reduction or waiver of interest under the fifth proviso. The amendment and the rules which came into operation later must in view of the retrospective operation be deemed to be then extant, and the fact that the Income-tax Officer companyld number in making the assessment have adjusted his approach to the problem before him in the light of those provisions is irrelevant in companysidering the legality of his over. The order of the Income-tax Officer which did number take numbere of the law deemed to be in force must be regarded as defective. The matter was brought before the Commissioner of Income-tax and it is unfortunate that the Commissioner in companysidering the matter under S. 33-A assumed that the amending Act 25 of 1958 had numberretrospective operation and rejected the claim of the assesses on the ground that at the date when the order of assessment was made, Act 25 of 1953 had number companye into operation, and that the Act became effective as from December .1953 when the rules were farm ed. In so holding, the Commissioner companymitted an error of law apparent on the face of the record. The High Court was therefore right in setting aside the order which was passed by the Commissioner without companysidering the proviso to S. 1.8-A 6 which was clearly applicable to the case of the assesses and in the light of A. 48 which was enacted in pursuance of that Proviso. The Attorney-General companytended that the petition filed by the assessee did number expressly seek to plead the case which was ultimately made out by the High Court. It is true that the petition is somewhat vague in setting out the material particulars which have a bearing on the plea which appealed to the High Court. But it cannot be said, having regard specially to paragraph 6, clause iii , of the petition that in granting relief to the assessee a new case was made out by the High Court. The appeal fails and is dismissed with companyts. There will be one hearing fee in Civil Appeals Nos. 1003 of 1963 and 1004 of 1963. Civil Appeal No. 1004 of 1963. - The facts in this case are substantially the same as in the companypanion Civil Appeal No. 1003 of 1963, and for reasons set out in the judgment in that case this appeal also fails and is dismissed. The appellants will pay the companyts of the assessee. Mudholkar, J. I agree with my learned brother Shah J. that the expression civil proceedings in article 133 1 of the Constitution cannot be restricted to proceedings which arise out of civil suits or proceedings. A proceeding before the High Court under article 226 or article 227 in which relief is sought in respect of liability to pay tax or penalty levied by a revenue authority would, accordingly, be a civil proceeding. The High Court was, therefore, companypetent to grant a certificate in this case under article 133 1 . On the merits my learned brother has held that the High Court was right in quashing the order of the Income-tax Commissioner, Bombay, by which he companyfirmed the order of the First Income-tax Officer, C-II Ward, Bombay dated October 4, 1958, rectifying under section 35 of the Income-tax Act, 1922, the regular assessment made by him on March 31, 1953. The sequence of the relevant events which have occurred is as follows On September 17, 1947, the respondents field under section 18A 2 an estimate of their income and on September 27, 1947, they made an advance payment of tax on its basis. On January 10, 1948, they filed a revised estimate in pursuance of which they made a further advance payments towards the tax on January 17, 1948. On August 23, 1950 they paid the tax in pursuance of the provisional assessment made on July 22, 1950, under section 23B. All this was with respect to the assessment year 1948-49. While making the regular assessment on March 31, 1953, the Income-tax Officer omitted to charge penal interest squired by S. J3-A 6 of the Income-tax Act. It is number disputed that according to the law as it stood on the date on which the regular assessment was made the income-tax Officer was bound to charge penal interest. By Act 25 of 1953 which came into force on May 24, 1953 the following proviso was added to S. I8-A 6 interest squired by S. J3-A 6 of the Income-tax Act. It is number disputed that according to the law as it stood on the date on which the regular assessment was made the income-tax Officer was bound to charge penal interest. By Act 25 of 1953 which came into force on May 24, 1953 the following proviso was added to S. I8-A 6 Provided further that in such cases and under such circumstances as may be prescribed, the Income-tax Officer may reduce or waive the interest payable by the assessee. In order to give effect to the proviso the Central Board of Revenue framed rule 48 in the cases and under the circumstances mentioned below, namely - Where the relevant assessment is companypleted more than one year after submission of the return, the delay in assessment number being attributable to the assessee. Where a person is under section 43 deemed to be an agent of another person and is assessed upon the r income. Where the assessee has income from an unregistered firm to which the provisions of clause b of sub-section 5 of section 23 are applied. Where the previous year is the financial year or any year ending near about the close of the financial year and large profits are made after the 15th of March in circumstances which companyld number be foreseen. Any case in which the Inspecting Assistant Commissioner companysiders that the circumstances are such that a reduction or waiver of the interest payable under section 18A 6 is justified. On October 4, 1956, the Income-tax Officer made the following order under section 35 of the Act During the interest checking of C-II Ward, the auditor has pointed out a mistake in number charging penal interest under section 18A 6 . As this mistake is apparent from record the same is rectified under section 35 after giving due numberice to the assessee. Revised numberice of demand to be issued. Thereafter, a numberice demanding Rs. 14,929-10-0 was issued to the respondents. The respondents challenged this order before the Commissioner of Income-tax Bombay. The main companytention raised before him was that the companymission to charge penal interest at the time of regular assessment cannot be companysidered to be a mistake apparent from the record in view of proviso to section 18A 6 and the rules made thereunder and therefore the Income-tax Officer companyld number rectify the regular assessment by resort to section 35 of the Act. His companytention was number accepted by the Income-tax Commissioner. He however, directed that in the circumstances of the case the respondents would be liable to pay penal interest only for the period between January 1, 1948, and June 13, 1950. Being dissatisfied with this decision the respondent moved the High Court for a writ under article 226 of the Constitution and succeeded in having the numberice of demand quashed. The ground upon which the High Court granted relief to the respondents was that the Amending Act of 1953 which enacted the last proviso to section 18A 6 was made retrospective from April 1, 1952 that, therefore, the proviso must be regarded as being on the statute book on the date on which the regular assessment was made, that, according to the High Court, being the position the companyclusion to the reached was that the Income-tax Officer had vested in him a discretion to reduce or waive the interest payable by the assessee numberwithstanding the fact that the proviso was number there on the statute book when the assessment order was made. After referring to the earlier decision of the High Court in Shantilal Rawji v. M. C. Nair, IV Income-tax Officer, E Ward, Bombay, the learned judges observed In our judgment in the case we referred to the decision of the Supreme Court in State of Bombay v. Pandurang Vinayak where their Lordships of the inserted in any statute and being given retrospective operation. We also referred to a passage from the judgment of Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury Borough Council, in which the learned law Lord very forcibly brought out the full effect of the legal fiction. The view which we ultimately took of the matter was that the Income-tax Officer had numberjurisdiction to pass the order of rectification. By operation of the deeming provision, which was retrospective in its operation, it was to be assumed and taken that on the date on which he made the assessment order he had jurisdiction and power to reduce or waive the amount of interest payable by the assessee. The Income-tax Officer number having done so, the only inference possible was that he had decided to waive the amount of interest and in those circumstances he had numberjurisdiction subsequently There is numberdoubt that by making the proviso in question retrospective as from April 1, 1952, the legislature has created a fiction and because of that fiction we must proceed on the footing that the proviso was in existence when the regular assessment was made. The learned Attorney-General however, companytended before us that though that was the position the proviso companyld number be given effect to till the Central Board of Revenue prescribed the class of cases and circumstances in which an income-tax authority companyld exercise the discretion companyferred by the proviso. He pointed out that the rule 48 framed by the Central Board of Revenue which prescribes these matters does number make it retrospective and therefore, it should be deemed to be only prospective in its application. I find it difficult to accept this argument. The proviso was itself made retrospective as from April 1, 1952. Rule 48 as soon as it was framed was to be read along with the proviso and as the proviso is retrospective the rule must also be deemed retrospective. It is a well accepted principle of companystruction of statutes that even if a provision of law may number have been expressly made retrospective it companyld be, deemed to be so if the circumstances justify the inference that the legislature intended that it should be retrospective. Such an intention is evident this case.deemed retrospective. It is a well accepted principle of companystruction of statutes that even if a provision of law may number have been expressly made retrospective it companyld be, deemed to be so if the circumstances justify the inference that the legislature intended that it should be retrospective. Such an intention is evident this case. Even though the proviso and the rule must be deemed to have been in force on April 1, 1952, I find it difficult to agree with the High Court that companymission to charge penal interest at the time of making the regular assessment must be ascribed to the exercise of discretion by the Income-tax Officer. Let is number be forgotten that when he made that assessment, in point of fact, he possessed numberdiscretion and, therefore, he was bound by law to charge penal interest. His companymission to do so must, therefore, be ascribed to an oversight and number to deliberatness. An omission to do what he was bound by law to do sic the Income-tax Officer companymitted an error and that error appears on the face of the record. He was, therefore, companypetent to rectify under section 35. Indeed, if instead on March 31, 1953, the Income-tax Officer had made the regular assessment on March 31, 1952, companyld there have been any scope for the surmise that his omission to charge penal interest was attributable to the exercise of any discretion At any rate with out further material we cannot even assume that while making the regular assessment on March 81, 1953 the Income-tax Officer, upon an erroneous view of law, came to the companyclusion that he had discretion under S. 18-A 6 to reduce or waive any interest and that, therefore, he purported to exercise that discretion. At least prima facie the Income-tax Officer in omitting to charge penal interest made a mistake. This would appear to be borne out by the fact that on October 14, 1956 when he made good the omission by resorting to the power companyferred by S. 35 he accepted the position that what he did earlier was through mistake. In the circumstances, therefore, agreeing with the Income-tax Commissioner but disagreeing with the High Court, I hold that the Income-tax Officer was companypetent to rectify the mistake under S 35. I would therefore, allow the appeals and quash the order of the High Court but in the circumstances of the case would make numberorder as to companyts. ORDER. Civil Appeals Nos. 1003 and 1004 of 1963. - In accordance with the opinion of the majority, these appeals are dismissed with companyts.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 356 of 1965. Appeal by special leave from the judgment and decree dated October 27, 1964, of the Madhya Pradesh High Court in Second Appeal No. 240 of 1964. Sen and M. S. Gupta, for the appellants. T. Desai and A. G. Ratnaparkhi, for the respondents. The Judgment of the Court was delivered by Sarkar, J. The first respondent Tikam Das had let out a house in the city of Jabalpur to the second respondent Surya Kant Naidoo. Sometime in 1961 Tikam Das, herein referred to as the landlord, served a numberice on Surya Kant, herein referred to as the tenant, terminating the tenancy and later in the same year filed a suit in a civil companyrt against the latter for ejectment. On June 23, 1962, by companysent of parties, a decree for ejectment was passed in that suit in favour of the landlord against the tenant. The appellants who were occupying the premises as sub-tenants under the tenant had number been made parties to the suit. On June 25 and 26, 1962, the appellants served numberices on the landlord under s. 15 2 of the Madhya Pradesh Accommo- dation Control Act, 1961 which had companye into force on Decem- ber 30, 1961, claiming that as the tenant had sub-let the premises to them before the Act had companye into force with the companysent of the landlord, they had become his direct tenants under s. 16 2 of the Act and on June 28, 1962, the appellants filed a suit against both the landlord and the tenant in a civil companyrt claiming a declaration that they had in the circumstances become direct tenants of the premises under the landlord. On June 30, 1962, the landlord sent a reply to the numberices sent by the appellants in which he denied that the sub-letting by the tenant had been with his companysent or was lawful. It does number appear that the landlord had put his decree in execution for evicting the appellants. One of the points canvassed in the High Court was whether in view of s. 45 1 of the Act a civil companyrt was companypetent to entertain the appellants suit and it held that it was number and in that view of the matter dismissed the suit. The question is whet-her the High Court was right. The Act established certain authorities called Rent Controlling Authorities and gave them power to decide various matters. Sub- ,section 1 of s. 45 states that numbercivil companyrt shall entertain any suit or proceeding in so far as it relates to any matter which the Rent Controlling Authority is empowered by ,or under this Act to decide. If, therefore, the suit related to a matter which a Rent Controlling Authority had jurisdiction to decide, the civil companyrt would have numberjurisdiction to entertain it. Now the appellants suit was for a declaration that they had .become direct tenants under the landlord by virtue of s. 16 2 of the Act. That provision is in these terms S. 16. 1 Where, before the companymencement of this Act, the interest of a tenant in respect of any accommodation has been determined without determining the interest of any sub-tenant to whom the accommodation either in whole or in part had been lawfully sub-let, the subtenant shall, with effect from the date of the companymencement of this Act be deemed to have become a tenant holding directly under the landlord on the same terms and companyditions on which the tenant would have held from the landlord, if the tenancy had companytinued. Clearly the appellants would number be entitled to the benefit of this provision unless the sub-letting to them was lawful. This is where their difficulty arises. Sub-section 2 of s. 15 deals with the case of a sub-letting before the Act and provides for a numberice of the sub-letting being given to the landlord by the tenant and the sub-tenant. There is numberdispute that the sub-letting to the appellants was before the Act and they had given the numberice. The subletting, therefore, companyes within sub-s. 2 of s. 15. Then we companye to sub-s. 3 of s. 15 which provides, Where in any case mentioned in sub-section 2 , the landlord companytests that the accommodation was number lawfully sub-let and an application is made to the Rent Controlling Authority in this behalf, either by the landlord or by the sub-tenant, within two months of the date of the receipt of the numberice of sub- letting by the landlord or the issue of the numberice by the tenant or the sub-tenant, as the case may be, the Rent Controlling Authority shall decide the dispute. This sub- section empowers a Rent Controlling Authority to decide whether a sub-letting was lawful where the landlord disputes that the subletting was lawful, on an application made to it by either party within the period mentioned. When the Rent Controlling Authorities have the power to decide the lawfulness of the subletting, a civil companyrt is plainly debarred from deciding that question by s. 45 1 . In the present case the landlord did companytend that the sub-letting was number lawful. The appellantss suit was filed within the period mentioned in sub-s. 3 of s. So the Rent Controlling Authorities had the power to decide the question on which the appellants suit depended. It follows that the suit related to a matter which the Rent Controlling Authorities had power to decide and numbercivil companyrt was, therefore, companypetent to entertain it. Hence we think that the High Court was right in deciding that the suit had been filed in a companyrt incompetent to entertain it, and in dismissing it. It was said that a Rent Controlling Authority would have numberpower to decide a dispute as to whether a sub-letting was lawful where the numberice mentioned in s. 15 2 had number been served, orafter the period mentioned in sub-s. 3 of that section had expired if it had number been moved earlier. Another question mooted was that the two months mentioned in sub-s. 3 only provided a special period of limitation for the application mentioned in it and the provision of the period did number mean that a Rent Controlling Authority had power to decide the matter only if an application had been made within that period, so that if numbersuch application had been made, after the expiry of the period a civil companyrt would have jurisdiction to decide a dispute as to whether a sub-letting was lawful. The point is that the real effect of s. 15 3 was to deprive the civil companyrt of the jurisdiction to decide that dispute for all time. We do number feel called upon to decide these questions. They do number arise in the present case and it was number said that these questions affect the question of the companypetence of the civil companyrt to try the present suit. They clearly do number. The suit was filed within the period of two months during which admittedly the Rent Controlling Authorities had jurisdiction to decide the dispute on which it was based. Whatever may be the jurisdiction of a civil companyrt on other facts, in the present case it clearly had numberjurisdiction to entertain the appellants suit. It was said on behalf of the appellants that s. 15 3 had numberapplication to the present case as the landlord had before the appellants suit was filed, obtained a decree against the tenant for eviction. We are unable to accept this companytention. There is numberhing in sub-s. 3 of s. 15 to indicate that it does number apply to a case where a landlord has obtained such a decree. If in spite of the decree the appellants had a right under the Act to a direct tenancy under the landlord, they had a right to move the Rent Controlling Authority within the period mentioned number expired for a decision of the question that the sub-letting to them was lawful. If the Rent Controlling Authority had the power to decide that question, a civil companyrt would number be companypetent to decide the dispute in a suit brought within that period. So the decree does number make a civil companyrt, a companyrt companypetent to entertain the suit. It was also said that as the landlord had number applied under sub-s. 3 of s. 15-and this is number disputed by the landlord that provision is put out of the way and it must number be held that the appellants had become direct tenants under him. The words of the sub-section lend numbersupport to this companytention. The appellants can claim the direct tenancy only when they establish that the sub-letting to them was lawful. As they claim that right, they must establish it and they do number do so by the failure of the landlord to move for a decision that the sub-letting was number lawful. This companytention of the appellants seems to us to be untenable. In any case it is difficult to appreciate how the failure of the landlord to apply under s. 15 3 would affect the question of the companypetence of a civil companyrt to entertain the appellants suit which had been filed before the time limited by the sub-section for the landlord to apply to a Rent Controlling Authority had expired. We number companye to sub-s. 2 of s. 45 of the Act which is in these terms S.45. 1 Nothing in sub-section 1 shall be companystrued as preventing a civil companyrt from entertaining any suit or proceeding for the decision of any question of title to any accommodation to which this Act applies or any question as to the person or persons who are entitled to receive the rent of such accommodation. It is said by the appellants that their suit raises a question of title to the tenanted premises within the meaning of that word as used in the subsection. This companytention does number seem to us to be well founded. Accommodation has been defined in the Act as a building, garden, ground, out-house, or garage appurtenant to it, its fixtures and furniture supplied for use there and also land number used for agricultural purpose. The word, therefore, refers to property of certain varieties and in our opinion the words title to any accommodation in the sub-section mean a right to or interest in property existing otherwise than under the Act and number those created by it. It does number include a subtenants right created by the Act to be treated under certain cir- 133. cumstances as the direct tenant of the landlord. This seems to, us to be clear from the whole scheme of the Act, which is to create certain rights and to leave them in certain cases to be decided by the Rent Controlling Authority established under it, quickly, inexpensively and summarily and with restricted rights of appeal from their decision. The object of the Act as disclosed by its scheme would be defeated if civil companyrts were to adjudicate upon the rights which it was intended the Rent Controlling Authorities would decide, with all the companysequent delay, expense and series of appeals. Again if the civil companyrts had the power to decide such rights, s. 15 3 would be meaningless, for the decision of the dispute as to whether sub-letting was lawful was necessary only for establishing a sub-tenants right to a direct tenancy under the landlord under s. 16 2 . Sub- section 2 of s. 45 was clearly intended only to protect a right to resort to a civil companyrt for the decision of a question as to an interest in property existing apart from the Act companycerning which an adjudication may have been incidentally made by a Rent Controlling Authority in deciding a question which it had been expressly empowered by the Act to decide. We, therefore, think that sub-s. 2 of s. 45 does number authorise a civil companyrt to decide the dispute as to the lawfulness of the sub-letting and does number therefore make it companypetent to entertain the appellants suit. For these reasons, in our view, numbercivil companyrt had jurisdiction to try the appellants suit and it was rightly dismissed as having been filed in an incompetent tribunal.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 464 of 1965. Appeal by special leave from the order dated October 17, 1964, of the Government of India, Ministry of Steel and Mines, Department of Mines and Metals on an application under Rule 54 of the Mineral Concession Rules 1960. S. Pathak, S. N. Andley, Rameshwar Nath, for the appellant. V. Gupte, Solicitor-General, R. N. Sachthey and R.G.K. Achar, for the respondents. Subba Rao, J. delivered a separate Opinion. The Judgment of Mudholkar and Bachawat, JJ. was delivered by Bachawat, J. Subba Rao, J. This appeal by special leave is directed against the order of the Government of India rejecting the revision filed by the appellant against the order of the Government of Maharashtra. The appellant, the Madhya Pradesh Industries Ltd., is a public limited companypany engaged in mining manganese ore. On February 5, 1941, one Rai Bahadur Bansilal Abirchand took a lease of a land of extent 216 acres and 92 cents in the Government Forest, East Pench Range, in the Tahsil of Ramtek in the District of Nagpur, from the Governor of Central Provinces and Berar for a term of 15 years companymencing from September 10, 1940. Under an indenture dated March 4, 1952, the appellant obtained a transfer of the said leasehold interest from the successors in interest of the said Bansilal Abirchand. After the transfer, the appellant entered into possession of the said extent of land and is alleged to have spent about Rs. 10,00,000 for the purpose of developing the area to carry out the mining operation. The said lease was to expire on September 9, 1955. On the expiry of the said lease the appellant applied for the renewal of the lease for a further period of 20 years to the appropriate authority, namely, the Secretary to Government, Commerce and Industries Department, Madhya Pradesh, Nagpur. After a protracted companyrespondence companyering a period of about 3 years, the offer on special duty, Industries and Co-operation Department, State of Bombay, informed the appellant by letter dated September 2, 1958, that the said renewal companyld number be granted. The appellant filed a revision against that order to the Central Government, but that was dismissed on December 14, 1958. On April 9, 1959, the State of Bombay issued a numberification calling for applications from the public in respect of the least of the said mines. On May 15, 1959, the appellant filed an application for the grant of a lease for a period of 20 years in respect of the said mines. Presumably others also filed similar applications. On July 8, 1959, the Government of Bombay made an order -ranting the entire area of the said mines to the appellant and by letter dated July 14, 1959, informed him of the same. During the year 1960 the territories forming part of the State of Bombay were divided and the State of Maharashtra and the State of Gujarat came into being and the said mines fell in the Maharashtra State. On August 25, 1960, the Maharashtra Government issued a numberification for the information of the public that the said mines were reserved for the exploitation of minerals in the public sector. Thereafter on January 16, 1961, the Collector of Nagpur informed the appellant that its application for the ,ease of the mines was rejected as the mines in question fell in a block reserved for State exploitation. On March 11, 1961, the appellant filed a revision to the Central Government against the said order. On June 22, 1961, the Central Government informed the appellant that instructions had been issued to the Government of Maharashtra, Industries and Labour Department, Bombay, for reconsidering its application and, therefore, it might pursue the matter with the said Government. Accordingly, the appellant took up the matter with the Maharashtra Government. By letter dated December 19, 1961, the Government of Maharashtra informed the appellant that its application for the mining lease had been rejected. Thereafter, the appellant on or about February 17, 1962, filed a revision application before the Central Government against the said order of the Government of Maharashtra. On October 17, 1964, the Central Government rejected the revision application. It is stated in the companynter-affidavit filed by the Central Government that subsequently the Government of Maharashtra, after obtaining the companysent of the Central Government, had issued a numberification dated March 26, 1965, inviting applications from the public for the grant of mineral companycessions in the said area. It is also stated therein that the appellant has submitted its application for the -rant of mining lease in respect of the said area in response to the said numberification. This is number disputed. The appellant filed the present appeal against the order of the Central Government dated October 17, 1964, dismissing its revision petition against the order of the Government of Maharashtra. To that appeal, the Central Government is made the first respondent the Under Secretary to the Government of India in the Ministry of Steel and Mines, who made the said order, the second respondent-, and the State of Maharashtra, the third respondent. Mr. Pathak, learned companynsel for the appellant raised before us the following points 1 The order passed by the Central Government is bad, because, though it is a judicial order, numberreasons are given for rejecting the revision of the appellant. 2 The order is bad also because it has number companyplied with the principles of natural justice, namely, i though the appellant requested for a personal hearing, it was number acceded to and ii the Central Government had taken into companysideration extraneous matters without giving an opportunity to the appellant to explain them. 3 The order of the Central Government is illegal, because it ignored the final order made by the State Government granting the lease of the mines to the appellant and also because it should have held that the Central Government companyld number place the mines, in the public sector without companyplying with the provisions of s. 17 of the Mines and Minerals Regulation and Development Act, 1957 Act 67 of 1957 , hereinafter called the Act. The learned Solicitor General, while companytroverting the legality of the said companytentions, points out that this is number a fit case for the exercise of the discretionary jurisdiction of this Court under Art. 136 of the Constitution inasmuch as the Maharashtra Government has number called for fresh applications for the granting of licence in respect of the said mines and the appellant, along with others. has put in its application to the said Government. To appreciate the first point it will be companyvenient at the outset to read the relevant provisions of the Act and the Rules made thereunder. Under s. 5 of the Act, numbermining lease shall be granted by a State Government to any person unless he satisfied the companyditions laid down therein. Under s. 8 2 thereof, numbermining lease can be granted in respect of manganese ore, among ,others, without the previous approval of the Central Government. Section 10 prescribes that an application for a mining lease in respect of any land in which the minerals vest in the Government shall be made to the State Government companycerned in the prescribed manner. Section 30 companyfers on the Central Government power to revise any order of the State Government either on an application made by an aggrieved party or suo motu. In supersession of the earlier rules, the Central Government, in exercise of the powers companyferred on it by s. 13 of the Act, made rules for carrying out the purpose of the Act. Chapter IV of the Rules provides for the grant of mining leases in respect of land in which the minerals belong to Government and also the manner of disposal of applications for a mining lease or for the renewal of mining lease by the State Government. Rule 26 says that where the State Government passes any order refusing to grant or renew a mining lease, it shall companymunicate in writing the reasons for such order to the person against whom such order is passed. Under r. 54, any person aggrieved by any order made by the State Government may within two months from the date of tile companymunication of the order to him apply to the Central Government for the revision of the order. A companyrt- fee is prescribed for the said revision. Rule 55., which is the crucial rule, reads Where a petition. for revision is made to the Central Government under rule 54, it may call for the record of the case from the State Government, and after companysidering any companyments made on the petition by the State Government or other authority, as the case may be, may companyfirm. modify or set aside the order or pass such other order in relation thereto as the Central Government may deem just and proper Provided that numberorder shall be passed against an applicant unless be has been given an opportunity to make his representations against the companyments, if any. received from the State Government or other authority. A perusal of the said provisions makes it abundantly clear that the State Government exercising its powers under the Act and the Rules made thereunder deals with matters involving great stakes presumably for the said reason, the Central Government is companystituted as an authority to revise the order of the State Government. Rules 54 and 55 lay down the procedure for filing a revision against the order of the State Government and the manner of its disposal. Under r. 54, a revision application has to be filed with the prescribed companyrt-fee and under r. 55, the Central Government, after calling for the records from the State Government and after companysidering any companyments made on the petition by the State Government or other authority, as the case may be, may make an appropriate order therein. The proviso expressly says that numberorder shall be made unless the petitioner has been given an opportunity to make his representations against the said companyments. The entire scheme of the rules posits a judicial procedure and the Central Government is companystituted as a tribunal to dispose of the said revision. Indeed, this Court in Shivji Nathubhai v. The Union of India 1 ruled that the Central Government, exercising its power of review under r. 54 of the Mineral Concession Rules, 1949, was acting judicially as a tribunal. The new rule, if at all, is clearer in that regard and emphasizes the judicial character of the proceeding. If it was a tribunal, this Court under Art. 136 of the Constitution can entertain an appeal against the order of the Central Government made in exercise of its revisional powers under r. 55 of the Rules. This Court in a later decision in M S. Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala 2 went further and held that, as the decision of the Central Government was subject to an appeal to the Supreme Court under Art. 136 of the Constitution, the Central Government should give reasons for its order. It is true that in that case the Central Government reversed the order of the Directors of a companypany refusing to register transfers. but that was number the basis of the decision. The necessity for giving reasons was founded on the existence of an appeal to the Supreme Court against the said order. The learned Solicitor General argues that, if the Central Government is to give reasons when it functions as a tribunal, it will obstruct the work of the Government and lead to unnecessary delays. I do number see any justification for this companytention. The Central Government functions only through different officers and in this case it functioned through an Under Secretary. The companydition of giving reasons is only attached to an order made by the Government when it functions judicially as a tribunal in a companyparatively small number of matters and number in regard to other 1 1960 2 S.C.R. 775. 2 1962 2 S.C.-R. 339. Sup./65-2 administrative orders it passes. The delay in disposal of can be attributed to many reasons and certainly number to the giving of reasons by tribunals. The question cannot be disposed of on purely technical company- siderations. Our Constitution posits a welfare State it is number defined, but its incidents are found in Chapters III and IV thereof, i.e., the Parts embodying fundamental rights and directive principles of State Policy respectively. Welfare State as companyceived by our Constitution is a State where there is prosperity, equality, freedom and social justice. In the companytext of a welfare State, administrative tribunals have companye to stay. Indeed, they ,are the necessary companycomitants of a welfare State. But arbitrariness in their functioning destroys the companycept of a welfare State itself. Self-dicipline and supervision exclude or at any rate minimize arbitrariness. The least a tribunal can do is to disclose its mind. The companypulsion of disclosure guarantees companysideration. The companydition to give reasons. introduces clarity and excludes or at any rate minimises arbitrariness it gives satisfaction to the party against whom the order is made and it also enables an appellate or supervisory companyrt to keep the tribunals within bounds. A reasoned order is a desirable companydition of judicial ,disposal. The companyception of exercise of revisional jurisdiction and the manner of disposal provided in r. 55 of the Rules are indicative ,of the scope and nature of the Governments jurisdiction. If tribunals can make orders without giving reasons, the said power in the hands of unscrupulous or dishonest officers may turn out to be a potent weapon for abuse of power. But, if reasons for an order are given, it will be an effective restraint on such abuse, as the order, if it discloses extraneous or irrelevant companysiderations, will be subject to judicial scrutiny and companyrection. A speaking order will at its best be a reasonable and at its worst be at least a plausible one. The public should number be deprived of this only -safeguard. It is said that this principle is number uniformly followed by appellate companyrts, for appeals and revisions are dismissed by appellate and revisional companyrts in limine without giving any reasons. There is an essential distinction between a companyrt and an administrative -tribunal. A Judge is trained to look at things objectively, uninfluenced by companysiderations of policy or expediency but, an executive officer generally looks at things from the standpoint of policy and expediency. The habit of mind of an executive officer so formed cannot be expected to change from function to function or from act to act. SO it is essential that some restrictions shall be imposed on tribunals in the matter of passing orders affecting the rights of parties and the least they Should do is to give reasons for their orders. Even in the case of appellate companyrts invariably reasons are given, except when they dismiss an appeal or revision in limine and that is because the appellate or revisional companyrt agrees with the reasoned judgment of the subordinate companyrt or there are numberlegally permissible grounds to interfere with it. But the same -reasoning cannot apply to an appel- late tribunal, for as often as number the order of the first tribunal is laconic and does number give any reasons. That apart, when we insist upon reasons, we do number prescribe any particular form or scale of the reasons. The extent and the nature of the reasons depend upon each case. Ordinarily, the appellate or revisional tribunal shall give its own reasons succinctly but in. a case of affirmable where the original tribunal gives adequate reasons, the appellate tribunal may dismiss the appeal or the revision, as the case may be, agreeing with those reasons. What is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by reference to those given by the original tribunal. The nature and the elaboration of the reasons necessarily depend upon the facts of each case. In the present case, neither the State Governments number the Central Governments order discloses reasons for rejecting the application of the appellant. In the circumstances the Central Governments order is vitiated, as it does number disclose any reasons for rejecting the revision application of the appellant. As regards the second companytention, I do number think- that the appellant is entitled as of right to a personal hearing. It is numberdoubt a principle of natural justice that a quasi- judicial tribunal cannot make any decision adverse to a party without giving him an effective opportunity of meeting any relevant allegations against him. Indeed, r. 55 of the Rules, quoted supra, recognize the said principle and states that numberorder shall be passed against any applicant unless he has been given an opportunity to make his representations against the companyments, if any, received from the State Government or other authority. The said opportunity need number necessarily be by personal hearing. It can be by written representation. Whether the said opportunity should be by written representation or by personal hearing depends upon the facts of each case and ordinarily it is in the discretion of the tribunal. The facts of the present case disclose that a written representation would effectively meet the requirements of the principles of natural justice. But there is some apparent justification in the submission that the Central Government had taken into companysideration an extraneous matter that came into existence subsequent to the filing of the revision, namely, that Messrs. Manganese Ore India Ltd., which is a public sector undertaking, had applied for the lease of the area in question on October 5, 1962, for the purpose of mining. The appellant did number allege in its affidavit that this fact was number brought to its numberice before the Central Government made the order indeed, it did number file any reply affidavit to the effect that the said matter was kept back from it. I would have pursued the matter a little further but for the fact that I am refusing to interfere in this appeal on other grounds. There are numbermerits in the companytention that the Government of Bombay by its order dated July 14, 1959, granted the entire area of the said mines to the appellant for, under the Act the State Government has numberpower to make such a grant of Manganese Ore except with the previous approval of the Central Government. Admittedly, numbersuch approval was obtained. The said order can, therefore, only be companystrued at best to be a recommendation to the Central Government. Nor can I agree with the companytention of the learned companynsel based upon s. 17 of the Act. The companytention is that if the State Government intended to entrust the exploitation of the said mines to the public sector it companyld have done so only in strict companypliance with the provisions of s. 17 of the Act. Section 17 of the Act has numberhing to do with public or private sector it applies only to a specific case where the Central Government proposes to undertake prospecting or mining operations in any area number already held under any prospering licence or mining lease. In that event it shall follow a particular procedure before undertaking the mining operations. In the present case there was numberproposal on the part of the Central Government to undertake the mining operation in the area in question. That section has, therefore, numberbearing on the question raised. I have already numbericed that after the disposal of the revision by the Central Government the State Government again changed its mind and called for applications from the public for grant of mining licence in respect of the said area and the appellant, along with others, has applied for the same. Learned companynsel for the appellant, though he admits the said fact, companytends that though the appellant has a fresh opportunity to apply for the lease of the mines, it has to meet companypetition from others who did number enter the field earlier. But the people who entered the field earlier lid number prefer any revision against the order of the State Govern- ment aid, presumably, if we interfere at this stage, there would be unnecessary companyplications and public interest might suffer, as it might turn out that the appellant would be the only surviving applicant in the field among the earlier applicants. Though the appellant has to companypete with others who were number earlier in the field--this question we have numberprecise information-it has certainly an opportunity to apply for the lease. In the circumstances I do number think that this is a fit case for our interference in the exercise of our discretionary jurisdiction. The appeal is dismissed, but in the circumstances of the case, without companyts. Bachawat J. We agree that the appeal should be dismissed. We agree that a this is number a fit case for interference under Art. 136 of the Constitution, b the appellant was number entitled to a personal hearing, c s. 17 of the Mines and Minerals Regulation and Development Act, 1957 Act No. 67 of 1957 has numberbearing on the question in issue, and d the order of the Government of Bombay dated July, 14, 1959 was, in effect, a recommendation to the Central Government for the grant of a mining license to the appellant. But we are unable to agree with the companytention of Mr. Pathak that the order of the Central Government dated October 17, 1964, rejecting the revision application under r. 55 of the Mineral Concession Rules, 1960 is bad, because it did number give any reasons. By its order dated December 19, 1961, the State Government of Maharashtra rejected the appellants application for a mining lease for the reasons mentioned in the order. A reference to the order annexure R shows that the State Government gave full reasons. On February 17, 1962, the appellant filed a revision application before the Central Government against the order of the State Government under r. 55 of the Mineral Concession Rules, 1960. By its order dated October 17, 1964, the Central Government rejected the revision application stating I am directed to refer to your application No. A 32/8163 dated 17-2-1962 on the above subject, and to say that after careful companysideration of the grounds stated therein, the Central Government have companye to the companyclusion that there is numbervalid ground for interfering with the decision of the Government of Maharashtra rejecting your application for grant of mining lease for man manganese over an area of 216.92 acres in Government Forest East Panch Range, W. C. June- wand, Tahsil Ramtek, District Nagpur. Your application for revision is, therefore, rejected. The reason for rejecting the revision application appears on the face of the impugned order. The revision application was rejected, because the Central Government agreed with the reasons given by the State Government in its order dated December 19, 1961, and the application did number disclose any valid ground for interference with the order of the State Government. In our opinion, the Central Government, acting under r. 55, was number bound to give in its order, fuller reasons for rejecting the application. Mr. Pathak companytended that the effect of Art. 136 of the Con- stitution is that every order appealable under that Article must be a speaking order and the omission to give reasons for the decision is of itself a sufficient ground for quashing it. We are unable to accept this broad companytention. For the purposes of an appeal under Art. 136, orders of Courts and tribunals stand on the same footing. An order of Court dismissing a revision application often gives numberreasons, but this is number a sufficient ground for quashing it. Likewise, an order of an a administrative tribunal rejecting a revision application cannot be pronounced to be invalid on the sole ground that it does number give reasons for the rejection. In support of his companytention Mr. Pathak relied upon the following observations of Shah, J. in Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala 1 If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this Court under Art. 136 of the Constitution, we fail to see how the power of this Court can be effectively exercised if reasons are number given by the Central Government in support of its order. In that case, it appears that the Central Government acting as an appellate tribunal, under s. 111 3 of the Companies Act, 1956, had without giving any reasons for its order, set aside a resolution of the directors of a companypany refusing to register certain transfers of shares. There was numberhing on the record to show that the Central Government was satisfied that the action of the directors in refusing to register the shares was arbitrary and untenable, and, moreover, on the materials on the record 1 1962 2 S.C.R. 339, 357. it was number possible to decide whether or number the Central Government transgressed the limits of its restricted power under S. 1 1 1 3 . The Central Government reversed the decision appealed from without giving any reasons number did the record disclose any apparent ground for the reversal. In this companytext, Shah, J. made the observations quoted above, and held that there was numberproper trial of the appeals and the appellate order should be quashed. Hidayatullah, J. at p. 370 of the Report pointed out that there was numberreason for the reversal and the omission to give reasons led to the only inference that there was numbere to give. There is a vital difference between the order of reversal by the appellate authority in that case for numberreason whatsoever and the order of affirmance by the revising authority in the present case. Having stated that there was numbervalid ground for interference, the revising authority was number bound to give fuller reasons.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 167 of 1964. Appeal by special leave from the judgment and decree dated April 11, 1962 of the Orissa High Court in First Appeal No. 61 of 1959. V. Viswanatha Sastri and T. V. R. Tatachari, for the, appellant. N. Sinha and B. P. Jha, for respondents Nos. 1 and 2. The Judgment of the Court was delivered by Raghubar Dayal, J. This appeal, by special leave, is against the decree of the High Court of Orissa reversing the decree of the Court of the Subordinate Judge, Berhampur and dismissing the plaintiffs suit for recovery of Rs. 8,216 due on a promissory numbere executed by Kontaru Naiko, defendant No. 1 for Rs. 6,000. The plaintiff money-lender obtained a registration certificate under s. 5 4 and r. 5, of the Orissa Money- Lenders Act, 1939 Act III of 1939 , hereinafter called the Act, and the rules thereunder, on March 31, 1952. He obtained another registration certificate in 1955 which said that the maximum capital for which the certificate is granted is Rs. 8,000. The plaintiff advanced the loan to defendant No. 1 on May 19, 1954 and sued for the recovery of the amount due on this loan. It was companytended for the defendant that the suit was number maintainable as the maximum capital for which the plaintiff had required the registration certificate in 1952 was Rs. 2,000 and under the provisions of the Act. and the rules framed thereunder, he companyld number have advanced loan in excess of that amount and that his doing so made the registration of the appellant as a money-lender void and therefore the suit for recovery of Rs. 2,000 even was number maintainable. These companytentions were number accepted by the trial Court which decreed the suit against the defendants with the direction that defendants Nos. 2 and 3 sons of defendant No. 1, were number personally liable and were liable to the extent of the assets of their father in their hands. The High Court, however, took a different view, accepted the aforesaid companytentions of the defendants and dismissed the suit. The sole companytention for the appellant is that the High Court was in error in holding that the registration of the appellant as a registered money-lender in March 1952 became void when he advanced a loan in suit in excess of Rs. 2,000 in 1954 and that the High Court was also in error in holding that he companyld number have advanced the loan in excess of the maximum capital for which the registration certificate was wanted. The relevant provisions of the Act may number be set out. Capital, is defined in S. 2 c , to mean that which a moneylender invests in the business of money-lending whether in money or in kind. Registered money-lender, according to S. 2 m , means a person to whom a registration certificate has been granted under S. S. Section 5 provides for the registration of moneylenders and a registration fee. Sub-s. 1 thereof requires the applicant for registration to mention in the application particulars mentioned in that sub-section and such other particulars as may be Sub-s. 3 empowers the Provincial Government 3 47 to prescribe by rules for different classes of money-lenders and for different areas a registration fee number exceeding Rs. 25 to be paid by an applicant for registration. Sub-s. 4 empowers the Sub-Registrar to grant a registration in the prescribed form to the applicant except where the certificate previously granted to him has beencancelled under s. 18 and the order of cancellation is in force. Section 6 enacts that the registration certificate granted willbe in force for 5 years from the date on which it is granted. Section 7 provides for the registered money-lender to maintain accounts and to give receipts. Section 8 which provides for suits for recovery of loans by registered money-lenders reads Suit for recovery of loan maintainable by registered money-lenders only-A money-lender shall number be entitled to institute a suit for the recovery of a loan advanced by him after the date on which this section companyes into force unless he was registered under this Act at the time when such loan was advanced Provided that a money-lender shall be entitled to institute a suit to recover a loan advanced by him at any time in the companyrse of two years after the date on which the section companyes into force, if he is granted a certificate of registration under section 5 at any time before the expiration of the said years. Section 9 provides for the maximum rates at which interest may be decreed. Various other sections deal with other matters which the legislature thought fit to provide for in order to achieve the object of the Act which, according to the preamble, is to regulate money-lending transactions and to grant relief to debtors in the State of Orissa. Rule 1, clause c , of the Orissa Money-Lenders Rules, 1939, defines maximum capital to mean the highest total amount of the capital sums which may remain invested in a money- lending business on any day during the period of the registration certificate. Rule 3, cl. iii , requires every application for the registration of a money-lender to mention the maximum capital for which the certificate is wanted. Rule, 4 lays down the registration fees payable and fixes the fees according to the maximum capital in respect of which an application for such certificate is made. Rule 5 provides that registration certificate would be in Form in and that during the currency of a registration certificate application may be made for a registration certificate of a higher denomination and the provisions of rr. 3 to 5 shall, as far as may be, apply to it, credit being given to the registration fee already paid by the applicant. The question for decision in this case is practically the same as came up for decision before this Court in Sant Saranlal v. Parsuram Sahu 1 judgment. in which has been delivered today. The relevant provisions of the Bihar Money- Lenders Act, 1938 and the Bihar Money-Lenders Regulation of Transactions Act, Act mentioned above. What we have said in that case appropriately companyers the companytentions of the panics in this case. We do number therefore companysider it necessary to repeat the discussion of the various companytentions in this case. We hold that in the absence of any specific provision in the Act in this case providing for the fixing of the maximum capital which a money-lender can invest in money-lending business, it was number open to the State Government to frame a rule in that regard and that the rules framed by it about mentioning, in the application, the maximum capital for which the registration certificate was wanted and the mention in the certificate of the amount of the maximum capital for which the certificate is granted, do number lead to the companyclusion that the registration of the money-lender will become void if he exceeds the limit of the maximum capital laid down in the registration certificate. We do number companysider it necessary number to decide the other point raised with respect to the retrospective operation of the registration certificates of higher denomination obtained during the currency of a registration certificate.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATe JURISDICTION Civil Appeal No. 452 of 1963. Appeal by special leave from the judgment and decree dated March 24, 1960 of the Andhra Pradesh High Court in Appeal Suit No. 198 of 1957. V. Viswanatha Sastri, K. Rangachari and T. V. R. Tata- chari,for the appellants. Ranganadham Chetty and T. Satyanarayana, for the respondents. The Judgment of the Court was delivered by Bachawat J. This appeal arises out of a suit instituted by Atyam Veerraju as trustee of Sri Janardhana Swami Varu of Penugonda, a Hindu deity, against Nuli Subba Rao and Pechetti Venkanna for recovery of possession of agricultural Inam lands, R.S. No. 153/3, 2 acres 38 cents and R.S. No. 167, 4 acres 36 cents, totaling 6 acres 74 cents in Cherukuvada village, West Godavari District, Andhra Pradesh. The case made in the plaint is as follows The suit lands belong to Sri Janardhana Swami Varu. In 1851, one Ponnuri Anandu, the then Archaka and de facto trustee of the temple, arranged with Nuli Peda Narasimhulu, the great grandfather of the first defendant, that the latter would supply one- Fourth seer of gingili oil every day to the temple and instead of receiving the price of the oil would enjoy the income of the lands. The arrangement was reduced into writing. The first defendant and his predecessors have been in possession of the lands under this arrangement. The arrangement did number amount to an alienation it gave only a license to receive the income and appropriate it towards the price of the oil. Even if the arrangement amounted to a lease, the plaintiff has a right to put an end to it and to recover the lands. The arrangement was put an end to by numberices dated December 6, 1948 and August 31, 1949 issued by the plaintiffs advocate to the first defendant. The second defendant is a lessee of the suit lands under the first defendant. The defence is as follows The plaintiff is number the trustee of the deity and has numberright to sue on its behalf. There was numberarrangement a,, alleged in the plaint. The first defendant is entitled to the suit lands subject only to the burden of supplying one-fourth seer of gingili oil every day to the temple out of its income. In 1851, there was an arrangement between Peda Narasimhulu, the great grandfather of the first defendant and Ponnuri Anandu, the then Archaka of the temple that Peda Narasimhulu would provide one-fourth seer of gingili oil every day to the temple out of the C. I./65-10 income of the suit lands. This arrangement was reduced to writing. When this arrangement was made in 1851, Peda Narasimhulu was the owner in possession of the lands. Assuming that he got possession of the lands under the arrangement, Ponnuri Anandu and number the deity was the owner. Assuming that the lands belonged to the deity, the arrangement amounted to a transfer for valuable companysideration of a permanent right for possession and enjoyment of the lands in favour of Peda Narasimhulu and his successors-in-interest, reserving for the deity only the right to the supply of the oil. The arrangement is binding on the deity. In any event, Peda Narasimhulu and his successors-in-interest have been in uninterrupted possession and enjoyment of the lands for over a century and have acquired title to the lands by adverse possession subject only to the burden of supplying the oil. The suit filed a century after the death or termination of office of Ponnuri Anandu is barred by time. Pending the suit, the first defendant died, and his legal representatives, the third and fourth defendants, were substituted in his place. The Subordinate Judge, Eluru negatived the defence companytention that the plaintiff is number the trustee of the temple, and this companytention is numberlonger pressed. He found that 1 the suit lands belong to the deity, 2 the arrangement of 1851 amounted to a permanent lease of the lands by the then Archaka and de facto trustee of the temple to Peda Narasimhulu, on companydition of his supplying onefourth seer of gingili oil every day to the temple, and 3 the first defendant and his predecessors-in-interest have acquired title to the lands by adverse possession burdened with this companydition. On these findings, he dismissed the suit. This decree was companyfirmed by the High Court on appeal. Without expressing any opinion on the first two questions, the High Court agreed with the finding of the trial Court on the question of adverse possession. The plaintiff and two other persons number appeal to this Court by special leave. In this appeal, the following questions arise 1 Is the deity the owner of the suit lands ? 2 if so, what righits were acquired by Peda Narasimhulu under the arrangement of 1851, and 3 Have Peda Narasimhulu and his successors-in- interest acquired title to the lands by adverse possession subject to the burden of supplying one-fourth seer of gingili oil every day to the deity ? In support of their respective cases, both parties rely on documentary evidence. The documents filed by the plaintiff disclose that in all public records of the village of Cherukuvada, the deity is shown as the inamdar of the suit lands. The Inam Fair Register of Cherukuvada village Ex. A-4 shows that since fasli 1203 companyresponding to 1795 one Subnivas Raghoji Pantulu was the inamdar and in 1835, he sold the suit lands to one Murari Venkatarao, who, in his turn, sold the lands in 1851 to Penugonda Sri Janardhana Swami Veru for Rs. 120. By an order of the Inam Commissioner dated October 27, 1859, the title of the deity as inamdar of the suit lands was companyfirmed and title deed No. 469 was issued to the deity. In the Re-settlement Register of the village prepared in 1932 Ex. A-6 also, the deity is shown as the inamdar. In the Inam B Register for the village for fasli 1342 companyresponding to 1934, the suit lands are described as Devadavam, the deity shown as the inamdar and the occupation is shown as religious for the purpose of Deeparadhana in temple. These records do number show that Peda Narasimhulu or his successors-in-interest had any ,interest in the suit lands. By an order dated October 26, 1931, the Hindu Reli- gious Endowments Board, Madras framed a scheme for the temple under ss. 18 and 57 of the Madras Hindu Religious Endowments Act Madras Act 2 of 1927 in the presence of Nuli Subbt Rao, the then successor-in-interest of Peda Narasimhulu. In the schedule to the scheme, the suit lands are shown to be the property of the deity in the possession and enjoyment of Nuli Subba Rao. Subject to certain modifications, which are number material for the purpose of this suit, the scheme was companyfirmed by a decree of the District Judge, West Godavari on December 4, 1937, in O.S. No. 30 of 1932. The documents disclosed by the defendants show that since 1851 Nuli Peda Narasimhulu, his son, Subbarayudu, his grand- sons, Sriramulu and Narasimhulu, and his great grandson, Nuli Subba Rao, possessed and enjoyed the suit lands. Exhibit B-1 dated October 19, 1895 shows a mortgage and lease for six years by Sriramulu and Narasimhulu, Ex. B-2 dated April 7, 1902 discloses a mortgage and lease by Sriramulu, Exs. B-3, B-4, B-5 and B-6 show a mortgage and lease for five years by Sriramulu on March 1, 1910 and Ex. B-7 dated March 10, 1938 and Ex. B-8 dated August 19, 1942 are leases oil the suit lands for five years and eight years executed by Subba Rao. These documents and particularly Exs. 13-3, B-4 and B-5 recited that the lands were entered in the name of the deity in the village accounts of Cherukuvada and from generation to generation were in the possession and enjoyment of the family off Peda Narasimhulu who got them under the Sanad dated November 10, 1851 for purposes of Nanda Deepam evening lighting of the deity. It is number shown that these documents and the recitals in them were brought to the numberice of the temple authori- ties. These unilateral declarations cannot affect the title of the deity. Moreover, these documents companytain admissions that the lands were entered in the village accounts in the name of the deity. By a numberice dated June 16, 1929, the Hindu Religious Endowments Board demanded from Nuli Subba Rao annual companytribution for the expenses of the temple. By his reply dated October 25, 1929, Nuli Subba Rao denied liability for the payment of the companytribution and alleged that the lands were granted to his great grandfather, Peda Narasimhulu, by Ponnuri Anandu under the Sanad dated November 10, 1851, subject to the companydition of supplying one-fourth seer of oil every day to the deity, and under the terms of the Sanad, the lands passed to Peda Narasimhulu and the deity is entitled to get only the oil and to numberether right. But soon thereafter on numberice to Nuli Subba Rao, the Board framed the scheme dated October 26, 1931 declaring the lands to be the properties of the temple. The documents produced by the defendants do number displace the entries in the Inam Fair Register, the Inam B Register and the Re- survey and Re-settlement Register, which show that the suit lands are Devadayam, the deity is the registered inamdar and the pattas were issued to the deity. We are satisfied that the deity is the owner of the lands. We reject the claim of the defendants that in 1851 either Peda Narasimhulu or Ponnuri Anandu was the owner. We also reject the claim of the defendants that by the Sanad dated November 10, 1,851, the lands were companyveyed to Peda Narasimhulu subject to the burden of supplying oil for evening lighting purposes. Had the properties been companyveyed by the Sanad to Peda Narasimhulu, he and his successors would have been entered in the village accounts as the inamdars and the pattas in respect of the suit lands would have been issued to them. But all along the deity is shown as the registered inamdar and the relevant pattas were issued to the deity and number. to Peda Narasimhulu or his successors. In spite of a numberice served by the plaintiff, the, legal representatives of Nuli Subba Rao did number Produce the Sanad. We are unable to accept their explanation that they are number in possession of the Sanad. They have produced other ancient documents. A perusal of Exs. B-3 to B-7, A-9 and the written statement --,how,. that up to the date of the filing of the written statement the Sanad was in the possession of the successors of Peda Narasimhulu. We are satisfied that the legal representatives of Nuli Subba Rao are, still in possession of the Sanad and that they have deliberately withheld it. We must number examine the claim of the defendants that under the Sanad dated November 10, 1851, Peda Narasimhulu and his successors-in-interest acquired a right of permanent tenancy. The onus is upon the defendants to establish this claim. Where the tenancy is granted by an instrument in writing, the question whether the tenancy is permanent is a matter of companystruction, having regard to the terms of the deed, and where the language of the deed is ambiguous, having regard also to the object of the lease, the cir- cumstances under which it was granted and the subsequent companyduct of the parties, for an instance, see Sivayogeswara Cotton Press, Devangere v. M. Panchaksharappa 1 . If the origin of the tenancy is number known, the tenant may lead circumstantial evidence to establish his permanent right of occupancy.The evidence of long possession companypled with other circumstances such as uniform payment of rent, companystruction of permanent structures, successive devolutions of property by transfer and inheritance may lead to the inference that the tenancy is permanent, see Bjoy Gopal Mukherji v. Pratul Chandra Ghose 2 . The Court may refuse to draw this inference of a permanent tenancy at a fixed rent where the demised land belongs to a Hindu religious endowment, for the manager of the endowment has numberpower to grant such a lease in the absence of legal necessity, and the Court will number presume a breach of duty on his part. See Maharanee Shibissouree Debia v. Mothooranath Acharjoo 3 , Naini Pillai Marakayar v. Ramanathan Chettiar 4 . But the disability of the manager to grant a permanent lease at a fixed rent is number absolute he may grant such a lease for legal necessity. If by the production of the original grant or by other companyent evidence the tenant establishes the grant of a permanent by him and the validity of the lease companyes in question after a long lapse of time when direct evidence of the circumstances under which the grant was made is numberlonger available, the Court will make every presumption in favour of its validity and may assume that the grant was made for necessity, see Bawa Sitaram v. Kasturbbhai Manibhai 5 . This case was followed in Muhammad Mazaffar-Al-Musavi v. Jabeda Khatun 6 , where similar principles were applied to the case of a Muslim religious endowment. Now, companysider the facts of the present case. defendants proved that Peda. Narasimhulu and his successors-in- interest for four generations have been in companytinuous and uninterrupted possession of the suit lands for over a century since 1851. They supplied to the temple one-fourth seer of gingili oil every day for the evening lighting of the temple during all these years In 1851, the lands were dry, fetching very, little income, and it is possible 1 1962 3 S.C.R. 876. 2 1869 13 M. 1. A. 270, 275. 3 1929 L.R. 49 I.A. 54. 2 1953 S.C.R. 930. 4 1923 L.R. 51 I.A., 83, 96-98. 6 1930 I.L.R. 57 Cal. 1293 P.C. that one-fourth seer of gingili oil daily was then a reasonable rent. Subsequently, the lands were companyverted into wet lands, and they are number fetching a large income. In spite of the increase in land and the letting value, the temple authorities made numberattempt to raise the rent of the lands or to evict the tenants. From time to time, the tenants created mortgages and leases of the suit lands for short periods. Had the origin of the tenancy been number known, we companyld from the facts fairly draw the inference that the tenancy was permanent. Having regard to the long lapse of time, we might even have presumed that the permanent tenancy was granted for legal necessity. But in this case, the origin of the tenancy is known. The tenancy was granted by the Sanad dated November 10, 1851. Whether or number a permanent tenancy was granted is a question of companystruction of the Sanad. Only the Sanad companyld show what interest was ranted by it. The most striking feature of this case and the thing which tilts the scales against the defendants is the number-production of this Sanad. The defendants have deliberately withheld this document. We should, therefore, make every presumption against them to their disadvantage companysistent with the facts. We hold that the document, if produced, would have shown that the tenancy is number permanent. The proved facts are companysistent with a lease rather than a license. The manager of the temple in the ordinary companyrse of management had authority to grant leases of the agricultural lands from year to year. Considering all these facts, we hold that the Sanad granted to Peda Narasimhulu a lease of the suit lands from year to year in companysideration of his rendering one-fourth seer of gingili oil every day to the temple. The next question is whether the suit is barred by limitation and adverse possession. The manager of the temple had numberauthority to grant a permanent lease of the temple lands at a fixed rent without any legal necessity and had he granted such a lease, it would have endured for the tenure of his office only. See Vidya Varuthi Thirtha v. Baluswami Ayyar 1 . But he had ample power in the companyrse of management to grant a lease from year to year. The lease from year to year granted by Ponnuri Anandu in 1851 was, therefore, binding on the temple. This lease did number terminate with the expiry of the office of Ponnuri Anandu or the succeeding managers. It companytinued of its own force until it was terminated by numberice in 1949. The possession of the tenants during the companytinuance of this lease was number adverse to the temple. The defendants, however, companytend that the possession of Nuli Subba Rao became adverse as from October 25, 1929 when by a 1 1921 L.R. 48 I.A. 302. numberice Ex. A-9 of that date he asserted a hostitle title. This numberice was addressed to the President, Hindu Religious Endowments Board, Madras. The object of the numberice was to deny the liability of Subba Rao to pay any companytribution to the Board in respect of the temple. Incidentally, Subba Rao claimed title to the suit lands under the Sanad dated November 10, 1851, subject only to the burden of supplying gingili oil to the temple daily. This claim was based on the Sanad and ultimately it was a question of companystruction of the Sanad whether it granted the right claimed by Subba Rao. We have already held that under the Sanad the grantee got a tenancy from year to year only. Moreover, after the service of this numberice, the Hindu Religious Endowments Board, Madras framed a scheme in the presence of Nuli Subba Rao declaring that the suit lands belonged to the deity. No objection was raised by Nuli Subba Rao to this scheme. It is to be numbericed also that the trustees of the temple were number served by Nuli Subba Rao with the numberice of his claim of absolute right to the suit lands. It is number shown that since October 25, 1929 Nuli Subba Rao companytinued to be in possession of the suit lands on the basis of a numberorious claim of a hostitle title,. Having regard to s. 116 of the Indian Evidence Act, 1872, during the companytinuance of the tenancy, a tenant will number be permitted to deny the title of the deity at the beginning of the tenancy. In Bilas Kunwar v. Desraj Ranjit Singh 1 , the Privy Council observed A tenant who has been let into possession cannot deny his landlords title, however defective it may be, so long as he has number openly restored possession by surrender to his landlord. It is also well settled that during the companytinuance of the tenancy, the tenant cannot acquire by prescription a permanent right of occupancy in derogation of the landlords title by mere assertion of such a right to the knowledge of the landlord. See Mohammad Mumtaz Ali Khan v. Mohan Singh 2 , Madhavrao Waman Satindalgekar v. Raghunath Venkatesh Deshpande 3 , Naini Pillai Marakayar v. Ramanathan Chettiar 4 . In the last case, Sir John Edge said No tenant of lands in India can obtain any right to a permanent tenancy by prescription in them. against his landlord from whom he holds the lands. 1 191 5 I.L.R. 37 All. 557, 567. L.R. 50 I.A. 202. L.R. 50 I.A. 255. L.R. 51 I.A. 83. These decisions received the approval of this Court in Patna Municipal Corporation v. Ram Das 1 . In the last cited case, this Court refrained from pronouncing upon the soundness of the following observations in Bastacolla Colliery Co. Ltd. v. Bandhu Beldar 2 There are however, some cases in which a Jesse-, can acquire the right of a permanent right by prescription in spite of payment and acceptance of rent. Those are cases where the lessee pays rent on the basis of a numberorious claim of permanent tenancy to the knowledge of the owner. The acceptance of rent by the owner on the basis of the lessees claim as a permanent tenant will number prevent the acquisition of such a right by the, lessee. As we did number hear any argument on that point, we do number also decide whether this passage lays down the companyrect law. This passage must be read with the following observation of the Patna High Court in the same case If once a tenancy of some kind companyes into existence either under an express lease or under a lease implied by law, the tenant cannot companyvert his tenancy into a permanent one by doing any act adverse to the landlord. In the instant case, on October 25, 1929, Nuli Subba Rao was a tenant and by an adverse numberice during the companytinuance of his tenancy he companyld number acquire absolute title to the suit lands, number companyld he companyvert his tenancy into a permanent one. Moreover, it is number shown that since 1929 Nuli Subba Rao held the suit lands under a numberorious claim of either an absolute title or a permanent tenancy, or that he supplied oil to the temple on the basis of such a claim. It follows that during the period from 1851 to 1949 the possession of Peda Narasimhulu and his successors-in- interest was number adverse to the deity. During the period from 1851 to 1929 the title of the deity was number extinguished by adverse possession under S. 28 read with Art. 144 of the Indian Limitation Act, 1908 Act IX of 1908 and the companyresponding s. 28 and Art. 144 of the Indian Limitation Act, 1877 Act XV of 1877 , s. 29 and Art. 145 of the Indian Limitation Act, 1871 Act IX of 1871 and s. 1, cl. 12 of the Indian Limitation Act, 1859 Act XIV of 1859 . Nor was the title of the deity extinguished the period from 1929 to 1949 by the operation of s. 28 read with Art. 134-B introduced in the Indian Limitation Act. 1908 by the Limitation C.A. No. 593/03 decided on 11-8-1965 2 A. I.R. 1960 Patna. 344. Amendment Act Act 1 of 1929 . In our opinion, the transfer companytemplated by Art. 134-B is an illegal or unauthorised transfer by a previous manager. Article 134-B does number apply to a suit for recovery of a property, where the property has been lawfully transferred by a previous manager, and the transfer remains effective after his death, resignation or removal. The lease of 1851. by the previous manager was lawful and binding on the temple, and companytinued of its own force until 1949. Consequently, Art. 134-B has numberapplication to the present suit. The suit is one by a landlord to recover possession from a tenant and is governed by Art. 139. The tenancy was determined in 1949, and the suit being instituted on November 1, 1954 is well within time. The companytention that Peda Narasimhulu and his successors-in-interest acquired title to the suit lands by prescription and the suit is barred by limitation is therefore, rejected. The validity of the numberice terminating the tenancy is number disputed. The plaintiff is, therefore, entitled to recover the suit lands. In the result, the appeal is allowed, the judgment and decree of the Courts below are set aside. There will be a decree in favour of the trustees of the temple for possession of the properties mentioned in the schedule to the plaint. The trial Court is directed to enquire into the mesne profits and to pass an appropriate decree for the same in accordance with law.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 107 of 1965. Appeal by special leave from the judgment and order, dated June 22, 1965 of the Bombay High Court in Criminal Applica- tion No. 613 of 1965. Niren De, Additional Solicitor-General and B. R. G. K. Achar, for the appellant. K. Garg, D. P. Singh, M. K. Ramamurthi and S. C. Agar- wala for respondent No. 1. The Judgment of the Court was delivered by Subba Rao J. Prabbakar Pandurang Sanzgiri, who has been detained by the Government of Maharashtra under S. 30 1 b of the Defence of India Rules, 1962, in the Bombay District Prison in order to prevent him from acting in a manner pre- judicial to the defence of India, public safety and maintenance of public order, has written, with the permission of the said Government, a book in Marathi under the title Anucha Antarangaat Inside the Atom . The learned Judges of the High Court, who had gone through the table of companytents of the book. expressed their opinion on the book thus we are satisfied that the manuscript book deals with the theory of elementary particles in -in objective way. The manuscript does number purport to be a research work but it purports to be a book written with a view to educate the people and disseminate knowledge regarding quantum theory. The book is, therefore, purely of scientific interest and it cannot possibly cause any prejudice to the defence of India, public safety or maintenance of public order. In September, 1964, the detenu applied to the Government of Maharashtra seeking permission to send the manuscript out of the jail for publication but the Government by its letter, dated March 27, 1965, rejected the request. He again applied to the Superintendent, Arthur Road Prison, for permission to send the manuscript out and that too was rejected. Thereafter, he filed a petition under Art. 226 of the Constitution in the High Court of Maharashtra at Bombay for directing the State of Maharashtra to permit him to send out the manuscript of the book written by him for its eventual publication. The Government of Maharashtra in the companynter-affidavit did number allege that the publication of the said book would be prejudicial to the objects of the Defence of India Act, but averred that the Government was number required by law to permit the detenu to publish books while in detention. The High Court of Bombay held that the civil rights and liberties of a citizen were in numberway curbed by the order of detention and that it was always open to the detenu to carry on his activities within the companyditions governing his detention. It further held that there were numberrules prohibiting a detenu from sending a book outside the jail with a view to get it published. In that view the High Court directed the Government to allow the manuscript book to be sent by the detenu to his wife for its eventual publication. The State of Maharashtra has preferred the present appeal against the said order of the High Court. The companytentions of the learned Additional Solicitor General may be briefly stated thus When a person is detained he loses his freedom he is numberlonger a free man and, therefore, he can exercise only such privileges as are companyferred on him by the order of detention. The Bombay Conditions of Detention Order, 1951. which regulates the terms of the first respondents detention, does number companyfer on him any privilege or right to write a book and send it out of the prison for publication. In support of his companytention he relies upon the observations of Das, J., as he then was, in A. K. Gopalan v. State of Madras 1 wherein the learned Judge has expressed the view, in the companytext of fundamental rights, that if a citizen loses the freedom of his person by reason of a lawful detention, he cannot claim the rights under Art. 19 of the Constitution as the rights enshrined in the said article are only the attributes of a free man. Mr. Garg, learned companynsel for the detenu, raised before us the following two points 1 a restriction of the nature imposed by the Government on the detenu can only be made by an order issued by the appropriate Government under cls. f and h of sub-r. 1 of r. 30 of the Defence of India Rules, 1962, hereinafter called the Rules, and that too in strict companypliance with s. 44 of the Defence of India Act, 1962, hereinafter called the Act, and that as the impugned restriction was neither made by such an order number did it companyply with s. 44 of the Act, it was an illegal restriction on his personal liberty and 2 neither the detention order number the 1 1950 S.C.R. 88, 291. companyditions of detention which governed the first respondents detention enabled the Government to prevent the said respondent from sending his manuscript book out of the prison for publication and, therefore, the order of the Government rejecting the said respondents request in that regard was illegal. Article 358 of the Constitution suspends the provisions of Art. 19 of Part III of the Constitution during the period the proclamation of emergency is in operation and the order passed by the President under Art. 3 5 9 suspended the enforcement, inter alia, of Art. 21 during the period of the said emergency. But the Presidents order was a companyditional one. In effect it said that the right to move the High Court or the Supreme Court remained suspended if such a person had been deprived of his personal liberty under the Defence of India Act, 1962, or any rule or order made thereunder. If a person was de lived of his personal liberty number under the Act or a rule or order made thereunder but in companytravention thereof, his right to move the said Courts in that regard would number be suspended. The question, therefore. in this case is whether the first respondents liberty has been restricted in terms of the Defence of India Rules whereunder he was detained. If it was in companytravention of the said Rules, he would have the right to approach the High Court under Art. 226 of the Constitution. In exercise of the Dower companyferred on the Central Government by s. 3 of the Act, the Central Government made the Defence of India Rules. Under s. 30 of the Rules the Central Government or the State Government, if it is satisfied with respect to any person that in order to prevent him from acting in any manner prejudicial to the matters mentioned therein, it is necessary so to do, may make an order directing that he be detained. Under subr. 4 thereof he shall be liable to be detained in such place and under such companyditions as to maintenance, discipline and the punishment of the offence and the breaches of discipline as the Central Government or the State Government, as the case may be, may from time to time determine. In exercise of the power company- ferred under sub-r. 4 of r. 30 of the Rules, the Government of. Maharashtra determined that the companyditions as to maintenance, discipline and the punishment of offenses and breaches of discipline governing persons ordered to be detained in any place in the State of Maharashtra, shall be the same as those companytained in the Bombay Conditions of Detention Order, 1951. The Bombay Conditions of Detention Order, 1951, does number companytain any companydition as regards the writing of books by a detenu or sending them out of jail for publication. Briefly stated, the scheme of the said C. and I./65-2 provisions is that a person can be detained if the appropriate Government is satisfied that in order to prevent him from doing the prejudicial acts mentioned in r. 30 of the Rules it is necessary to detain him in prison subject to the companyditions imposed in the manner prescribed in sub-r. 4 of r. 30 of the Rules. To put it in a negative form, numberrestrictions other than those prescribed under sub-r. 4 of r. 30 can be imposed on a detenu. If the appropriate authority seeks to impose on a detenu a restriction number so prescribed, the said authority will be interfering with the personal liberty of the detenu in derogation of the law whereunder he is detained. If that happens, the High Court, in terms of Art 226 of the Constitution, can issue an appropriate writ or direction to the authority companycerned to act in accordance with law. We have gone through the provisions of the Bombay Conditions of Detention Order, 195 1. There is numberprovision in that Order dealing with the writing or publication of books by a detenu. There is, therefore, numberrestriction on the detenu in respect of that activity. Sub-rule iii of r. 17 of the said Order reads All letters to and from security prisoners shall be censored by the Commissioner or the Superintendent, a the case may be. If in the opinion of the Commissioner or the Superintendent, the dispatch or delivery of any letter is likely to be detrimental to the public interest or safety or the discipline of the place of detention, he shall either withhold such letter, or despatch or deliver it after deleting any objectionable portion therefrom. In respect of the censoring of letters of security prisoners, the Commissioner or the Superintendent shall companyply with any general or special instructions issued by Government. The Maharashtra Government has number relied upon this rule. In deed, in the companynter-affidavit its case was number that it prohibited the sending of the book for publication under the said sub-rule, but that it was number required by law to permit the detenu to publish books while in detention number was it its case before the High Court that the publication of this book was detrimental to public interest or safety or the discipline of the place of detention. Prima facie the said sub-rule applies only to letters to and from security priso- ners and does number regulate the sending out of prison books for publication. Indeed, the learned Additional Solicitor General does number rely upon this provision. Let us number companysider the validity of the argument of the learned Additional Solicitor General. He relies upon the following observations of Das, J., as he then was, in A. K. Gopalans case 1 , at p. 29 1. If a mans person is free, it is then and then only that he can exercise a variety of other auxiliary rights, that is to say, he can, within certain limits, speak what he likes, assemble where he likes, form any associations or unions, move about freely as his own inclination may direct, reside and settle anywhere he likes and practise any profession or carry on any occupation, trade or business. These are attributes of the freedom of the per-son and are companysequently attached to the person. Relying upon these observations it is argued that freedom to publish is only a companyponent part of that of speech and expression and that in the light of the said observations, as the detenu ceased to be free in view of his detention, he cannot exercise his freedom to publish his book. In other words, as he is numberlonger a free man, his right to publish his book, which is only an attribute of personal liberty, is lost. The principle accepted by Das, J., as he then was, does number appear to be the basis of the companyclusion arrived at by the other learned Judges who agreed with his companyclusion. Different reasons are given by the learned Judges fro arriving at the same companyclusion. As has been pointed out by this Court in the second Kochunnis case 2 the views of the learned Judges may be broadly summarized under the following heads 1 to invoke Art. 19 1 of the Constitution, a law shall be made directly infringing that right 2 Arts. 21 and 22 companystitute a self-contained companye and 3 the freedoms in Art. 19 postulate a free man. Therefore, it cannot be said that the said principle was accepted by all the learned Judges who took part in A. K. Gopalans case . The apart, there are five distinct lines of thought in the matter of reconciling Art. 21 with Art. 19, namely, 1 if one loses his freedom by detention, he loses all the other attributes of freedom enshrined in Art. 19 2 personal liberty in Art. 21 is the residue of personal liberty after excluding the attributes of that liberty embodied in Art. 19 3 the personal liberty included in Art. 21 is wide enough to include some or all of the freedoms mentioned in Art. 19, but they are two distinct fundamental rights -a law to be valid shall number infringe both the rights 4 the expression law in Art. 21 means a valid law and, therefore, even if a persons liberty is deprived by law of detention, the said law 1 1950 S.C.R. 88. 2 1960 3 S.C.R. 887. shall number infringe Art. 19 and 5 Art. 21 applies to procedural law, whereas Art. 19 to substantive law relating to personal liberty. We do number propose to pursue the matter further or to express our opinion one way or other. We have only mentioned the said views to show that the view expressed by Das, J., as he then was, in A. K. Gopalans case 1 is number the last word on the subject. In this case, as we have said earlier, we are only companycerned with the question whether the restriction imposed on the personal liberty of the first respondent is in terms of the relevant provisions of the Defence of India Rules. Here, the first respondents liberty is restricted under the Defence of India Rules subject to companyditions determined in the manner prescribed in Sub-r. 4 of r. 30 thereof. We find it difficult to accept the argument that the Bombay Conditions of Detention Order, 1951, which lays down the companyditions regulating the restrictions on the liberty of a detenu, companyferred only certain privileges on the detenu. If this argument were to be accepted, it would mean that the detenu companyld be starved to death, if there was numbercondition providing for giving food to the detenu. In the matter of liberty of a subject such a companystruction shall number be given to the said rules and regulations, unless for companypelling reasons. We, therefore, hold that the said companyditions regulating the restrictions on the personal liberty of a detenu arc number privileges companyferred on him, but are the companyditions subject to which his liberty can be restricted. As there is numbercondition in the Bombay Conditions of Detention Order, 1951, prohibiting a detenu from writing a book or sending it for publication, the State of Maharashtra infringed the personal liberty of the first respondent in derogation of the law whereunder he is detained. The appellant, therefore, acted companytrary to law in refusing to send the manuscript book of the detenu out of the jail to his wife for eventual publication. In the view we have taken, another argument advanced by Mr. Garg, namely, that the restriction can only be imposed by an order made under s. 30 f or h of the Rules and that too in strict companypliance with s. 44 of the Act need number be companysidered. That question may arise if and when an appropriate companydition is imposed restricting the liberty of a detenu in the matter of sending his books for publication.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 481 of 1965. Appeal from the judgment and order, dated April 30, 1965, of the Bombay High Court in Special Civil Application No. 447 of 1965. B. Agarwala, S. N. Prasad, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. V. Gupte, Solicitor-General, and B. R. G. K. Achar, for respondent Nos. 2 to 4. The Judgment of the Court was delivered by Subba Rao J. This appeal by certificate raises the question of the true companystruction of the provisions of ss. 19 and 25 of the Bombay Municipal Borough Act, 1925 Bom. Act 18 of 1925 , hereinafter called the Act, read with s. 3 of the Maharashtra Municipalities Postponement of General Elections Pending Unification of Municipal Laws Act, 1964, hereinafter called the Maharashtra Act. The facts lie in a small companypass. The last general election of the, members of the Bhusaval Borough Municipality was held under the provisions of the Act in the year 1960. The first general meeting thereafter was held on February 18, 1961. Under the provisions of s. 25 of the Act. in the numbermal companyrse the life of the Municipality would have expired on February 17, 1965 but, under s. 3 of the Maharashtra Act the term of the Councillors of the Municipality was, by fiction, extended to and inclusive of December 31, 1965. On July 18, 1964, the appellant was elected the President of the Municipality and on the same day the Municipality passed a resolution to the effect that the term of the office of the President shall be the residue of the term of office of the Municipality. On the assumption that the term of the President expired on February 17, 1965, the Collector of Jalgaon issued a numberice on March 2, 1965, calling for a meeting of the Municipality on March 15, 1965, for electing a new President. Thereafter, the appellant filed an application under Arts. 226 and 227 of the Constitution in the High Court of Maharashtra for the issue of an appropriate order setting aside the numberice issued by the Collector. There the appellant companytended that, as the term of office of the Municipality had been extended by the Maharashtra Act up to December 31, 1965, he was entitled to companytinue in office as President till that date. A Division Bench of the said High Court rejected that companytention and dismissed the petition. Hence the appeal. The short question in the appeal is whether the expression the residue of the Municipality in the resolution of the Municipality, dated July 18, 1964, means the residue of the Municipality that would have been if the Maharashtra Act had number been passed or whether it should be interpreted in the companytext of the extended term provided by the Maharashtra Act. Mr. Agarwala, learned companynsel for the appellant, companytended that the appellant would get the extended term provided in the Maharashtra Act, because in effect it was an extension under the Act within the meaning of the second proviso to s. 19 of the Act or in any event he got the benefit because the Maharashtra Act in effect amended s. 25 of the Act, with the result the residue of the term was extended to December 31, 1965. The learned Solicitor-General, on the other hand, argued that the second proviso to s. 19 of the Act had numberapplication, for it dealt only with an extension by numberification or otherwise under the provisions of the Act and the statutory extension given by the Maharashtra Act companyld number possibly be an extension under the Act that even if the Maharashtra Act had the effect of amending s. 25 of the Act with the result that the life of the members of the Municipality was extended by the amendment of the Act itself, it would number help the appellant as the scope of the resolution passed by the Municipality should be companystrued on the basis of the circumstances existing at the time the resolution was passed, i.e., previous to the election of the President, and at that time the companyncillors of the Municipality companyld have only passed the resolution fixing the term of the President during the residue of the life the Municipality had at that time to put it in other words, the intention of the Councillors, who passed the resolution, companyld be gathered only from the circumstances, statutory or otherwise, existing at the time the resolution was passed. The problem presented from different angles by the learned companynsel can only be solved on a true interpretation of the said provisions. It will, therefore, be companyvenient at this stage to read the relevant provisions. Section 19 of the Act Save as otherwise provided in this Act a president or vice-president, shall hold his office for such term, number less than one year or number less than the residue of the term of office of the municipality, whichever is less and number exceeding four years, as the municipality shall, previous to the election of the president or vicepresident determine, or until the expiry within the said term of his term of office, as companyncillor, but shall be eligible for reelection Provided that Provided further that where the term of office of a municipality Is extended under this Act to a term number exceeding in the aggregate five years the president and vice-president holding offices immediately before the date with effect from which such term is extended shall companytinue to hold their respective offices until the date on which the term so extended expires. Section 25 of the Act Councillors numberinated or elected at a general election under this Act, shall, save as otherwise provided in this Act, hold office for a term of four years, extensible by order of the State Government to a term number exceeding in the aggregate five years, if on any occasion the State Government shall think fit, for reasons which shall be numberified together with the order in the Official Gazette so to extend the same Section 3 of the Maharashtra Act Postponement of municipal elections.-Notwith- standing anything in any Act by or under which any municipality is companystituted or established,- a b the term or extended term of office, of the Councillors or members of a municipality, who were in office on the date of the companymencement of the Ordinance and whose term or extended term will expire before the 31st day of December 1965 , shall be deemed to be extended to and inclusive of the 31st day of December 1965. SCHEDULE See section 2 The Bombay Municipal Boroughs Act, 1925 Bom. XVIII of 1925 . The companybined effect of these two Acts may be stated thus Under s. 25 of the Act the term of the Councillors of the Municipality is 4 years. It may be extended by the State Government to a term number exceeding in the aggregate five years. If the term is so extended by the Government in the manner prescribed by s. 25 of the Act, under the second proviso to s. 19 of the Act the term of the President also is automatically extended to the date on which the term so extended expires. The expression under this Act in the second proviso to s. 19 of the Act certainly attracts the extension of the term of the companyncillors under s. 25, as it is an extension under the Act. The impact of s. 3 of the Maharashtra Act on the provisions of the Act is that it number only extends the term prescribed under s. 25 of the Act but also the term extended under s. 25 or under any other section of the Act. If that be the legal effect of s. 3 of the Maharashtra Act, the second proviso is number attracted to the instant case, as there was numberorder or numberification issued under s. 25 or any other relevant section of the Act extending the term of the companyncillors fixed under s. 25 of the Act. Therefore for the present purpose we leave out of companysideration the second proviso to s. 19 and approach the problem on the basis of the fiction that the term of the companyncillors prescribed under s. 25 of the Act was extended up to December 31, 1965. If that be so, the next question is whether on July 18, 1964, when the Municipal companyncillors passed a resolution to the effect that the term of office of the appellant shall be the residue of the Municipality, their intention was that his term should extend only up to February 17, 1965, i.e., the date when the term of the Municipal companyncillors would have expired but for the statutory extension given by the Maharashtra Act. The intention of the Municipality can be gathered only from the circumstances, statutory or otherwise existing at the time when the resolution was passed and on the express terms of the said resolution. Under s. 19 of the Act, the Municipality can fix the term of office of the President between one and four years, except when the residue of the term of the Municipality is less than one year. But the second proviso to s. 19 also companytemplates the extension of the term of office of the Municipality under the provisions of the Act. It is, therefore, number possible to predicate that at the time the resolution was passed the Municipality companyld number have companytemplated a situation when the term of the Municipality would be extended under the provisions of the Act. With the knowledge of such a possible extension, when the members used the elastic expression residue, it is number reasonable to attribute to them the intention that they meant only the residue of the term available to them at that time. If that was their intention they would have prescribed a definite date on which the term of the President would expire. That apart, there is sufficient material on the record which indicates that the companyncillors designedly used the word residue instead of fixing a precise date. It appears that it was in the companytemplation of the companyncillors at the time of the election of the President that there was a possibility of the term of the Municipality being extended. In the Statement of Objects underlying the issuance of the Ordinance which culminated in the Maharashtra Act, it was observed as follows In July, 1963, Government appointed a Committee for the purpose of companysidering the question of unification of the four Municipal Acts which are at present in force in the State. As substantial changes are envisaged in the unified municipal law, it is companysidered expedient that the advantages of the new and uniform pattern of administration should be available to all those municipalities companycerned simultaneously with the holding of general election in accordance with the pro- visions of the unified law. Consequently, the Munici- parties that are elected or may be elected under the existing Acts may be short-lived, and the time, energy and expenditure incurred on holding any more general elections would be wasteful. It has, therefore, be-on decided to postpone the general elections to such muni- cipalities from the promulgation of the Ordinance until the 31st of December, 1965, by which time the new unified municipal law is expected to be enacted. This indicates that the question of extension of the term of the municipalities was under serious companysideration even in July 1963. Indeed, on or about July 18, 1964, when the term of the Presitent of the Municipality was extended, the Municipality passed a resolution recommending that the term of the Municipality be extended beyond 4 years. It is, therefore, clear that -on the basis of statutory and other circumstances obtaining at the time the extension was made, the companyncillors clearly expected that the term of the Municipality would be or companyld be extended and with that knowledge they passed the resolution fixing the term of the President for the residue of the term of the Municipality the intention appears to be that the term of the President should synchronize with the life of the Municipality existing or extended, as the case may be. In our view, therefore, the order of the High Court is number Correct and the same is set aside. A writ will issue prohibiting the Collector from holding the election of the President of the Municipality of the Bhusaval Borough till December 31, 1965. The companytroversy arose because the relevant provisions are number free from ambiguity.

Case appeal was accepted by the Supreme Court

ORIGINAL JURISDICTION Writ Petition No. 38 of 1965. Petition under Art. 32 of the Constitution of India for the enforcement of fundamental rights. S. Pathak, P. R. Naolekar, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the petitioner. K. Daphtary, Attorney-General, B. Sen, M. N. Shroff, and I. N. Shroff, for the respondents Nos. 1 to 4. The Judgment of the Court was delivered by Hidayatullah, J. The petitioner is a partnership firm which manufactures and sells, bidis, under the name and style of Anwarkhan Mehboob and Co., Jabalpur. In 1948 the petitioner firm, with a view to securing a supply of tendu leaves over the years acquired for a term of 25 years, the right to pluck and carry away tendu leaves from plants in ninety-nine villages in the former Imlai Estate from the Malguzar Raja Raghuraj Singh. The period of 25 years was to run from 1948 to 1973. The document, which was number registered annexure I , was executed by the Raja on August 22, 1948. It is a very brief document and all that it says is that tendu leaves in 99 villages have been sold for 25 years for a companysideration of Rs. 9,000 per year which must be paid after each tendu leaf crop is over but before the expiry of three months, that only the leaves should be plucked and that numberbushes should be cut down. In 1950 the Madhya Pradesh Abolition of Proprietary Rights Estates, Mahals and Alienated Lands Act No. 1 of 1951 was passed. Under the Act ,which may be briefly called the Abolition Act all rights,. title and interest vesting in the proprietor or any person having interest in such proprietary right through the pro- prietor, in an area to which the Abolition Act was extended including land cultivable or barren , grass land, scrub- jungle forest, trees etc., ceased and vested in the State for purposes of State, free from all encumbrances. The Government of Madhya Pradesh obstructed the persons who held companytracts for tendu leaves Jac, wood, timber or other forest produce, including the petitioner firm, The petitioner firm and many others petitioned to this Court under Art. 32 of the Constitution to enforce what they des- cribed as fundamental rights to property, and asked for writs or orders to restrain the State Government from enforcing the Abolition Act generally and in particular so as to interfere with the right of the petitioner firm to pick, gather and carry away the kind of forest produce for which they held agreements. A dozen such petitions were heard together, that of the petitioner being W. P. No. 309 of 1951 Firm Anwar Khan Mehboob Co. v. State of Madhya Pradesh , and were decided on December 23, 1952. The main judgment of this Court was pronounced in a petition filed by one Chhotabhai Jethabhai and is reported in Chhotabhai Jethabhai v. State of Madhya Pradesh 1 . A Divisional Bench of this Court held that companytracts and agreements, such as the one held by the petitioner firm, were in essence and effect licenses granted to the transferees to cut, gather and carry away, the produce in the shape of tends leaves, lac, or timber or wood. Holding further that there was numberhing in the Abolition Act to affect their validity or to extinguish such rights in favour of the State, the Divisional Bench ruled that the State had numberright to interfere with the rights under the companytracts and agreements. A writ of prohibition was issued, prohibiting the State from interfering in any manner whatsoever with the enjoyment of those rights. In cases where the periods under the companytracts had expired or where the proprietors had still to recover anything from transferees after the date of vestinG the State was held entitled to assert and enforce its rights standing in the shoes of the proprietors. The petitioner firm, in companymon with the other petitioners, on that occasion obtained a writ of prohibition also. It would have enjoyed the fruits of its agreement with the Raja till the year 1973 but other events followed. In 1964 the Madhya Pradesh Tendu Patta Vyapar Viniyaman Adhiniyam, 1964 29 of 1964 , companyveniently called the Adhiniyam was passed, as the preamble openly professes to make provision for regulating in the public interest the trade of Tendu leaves by creation of State 1 1953 S. C. R. 476 monopoly in such trade. The Adhiniyam companyferred power on the State Government to divide specified arm into units, to appoint its own agents for purchase and trade in tendu leaves, to set up advisory companymittees especially for the fixation of prices at which Government would purchase tendu leaves from growers of tendu leaves other than Government, to open depots and to purchase there tendu leaves at prices in the lists exhibited there. The Adhiniyam also required growers of tendu leaves, the manufacturers of bidis and exporters of tendu leaves to register. With a view to creating monopoly in favour of Government section 5 of the Adhiniyam imposed a companyplete restriction on purchase and transport of tendu leaves companytrary to the provisions of the Adhiniyam and companytravention of any provision was made punishable with imprisonment or fine and power was also given to forfeit the whole or any part of tendu leaves in respect of which there was companytravention. A power of entry, search and seizure was companyferred on police officers of the rank of Assistant Sub-Inspectors and above. We have given a resume of the provisions of the Adhiniyam but we must set out s. 5, because it is the heart of the Adhiniyam and also of the problem before us. Before we do so., a few definitions material to its companystruction and understanding may be numbered An agent in the Adhiniyam means the agent of Government and a grower of tendu leave means in respect of leaves grown a in a reserved or protected forest, or on unoccupied land as defined in the Madhya Pradesh Land Revenue Code 1959, the State Government b on lands with the Bhoodan holder or the Bhoodan tenant or lessee or grantee under certain Madhya Pradesh, Madhya Bharat, Vindhya Pradesh and Rajasthan Acts, those persons and c on other lands the tenure holder or a tenant or a Government lessee of the holding or the holder of service land, as the case may be, in any unit on which tendu leaves grow. Each of the terms holder of a service land, Government lessee, tenant and tenure holder is separately defined but as it was admitted before us that the petitioner firm is number one of them, the definitions need number detain us. Section 5 of the Adhiniyam provides as follows Restriction on purchase or transport of tendu leaves. sup. C.I/66-4 On the issue of a numberification under sub-section 3 of section 1 in any area numberperson other than- a the State Government b an officer of State Government authorised in writing in that behalf or c an agent in respect of the unit in which the leaves have grown shall purchase or transport tendu leaves. Explanation I. Purchase of tendu leaves from the State Government or the aforesaid Government officer or agent shall number be deemed to be a purchase in companytravention of the provisions of this Act. Explanation II. A person having numberinterest in the holding who has acquired the right to companylect tendu leaves grown on such holding shall be deemed to have purchased such leaves in companytravention of the provisions of this Act. Notwithstanding anything companytained in sub-section 1 ,- a a grower of tendu leaves may transport his leaves from any place within the unit wherein such leaves have grown to any other place in that unit and b tendu leaves purchased from the State Government or any officer or agent specified in the said sub-section by any person for manufacture of bidis within the State or by any person for sale outside the State may be transported by such person outside the unit in accordance with the terms and companyditions of a permit to be issued in that behalf by such authority and in such manner as may be prescribed. Any person desiring to sell tendu leaves may sell them to the aforesaid Government officer or agent at any depot situated within the said unit. We shall analyse the provisions of this section later. For the present we must follow up the narrative of events. By numberification the State of Madhya Pradesh, declared the areas to which the Adhiniyam extended and subdivided the area into units. The Imlai Estate, in respect of which the petitioner firm held its agreement, was divided up into unit No. 3 Baghraji leased area, unit No. 5 Kundam leased area, and unit No. 11 Umaria leased area. Pursuant to the provisions of the Adhiniyam, the State Government set up Advisory Committees under the Madhya Pradesh Tendu Patta Mantrana Samiti Mulya Prakashan Niyam, 1964 and framed rules called Madhya Pradesh Tendu Patta Vyapar Viniyaman Niyamavali, 1965. If it is necessary to name them again, the former will be called the Niyam and the latter the Niyamavali. The State Government then invited tenders for the areas including the three units but the remarks companyumn showed that these units were leased by the Malguzar to the petitioner firm up to the year 1973. No tenders were received for units 5 and 1 1 but there was a tender for unit 3. On March 20, 1965 the Minister for Forests in a meeting, informed the representatives of the petitioner firm that their leases stood extinguished by reason of the Adhiniyam and that time was extended for submission of fresh tenders in respect of the units left out. On March 23, 1965 tenders made by two persons in respect of unit 3 Baghraji and unit 11 Umaria were accepted and the Next day the petitioner firm was informed, by letter from the Divisional Forest Officer, Jabalpur Division, that the right to companylect tendu leaves in all the 99 villages of Imlai Estate was abrogated by the State Government under the Adhiniyam. The present petition was then filed. The arguments of Mr. G. S. Pathak in support of the petition were really two although they companyered a good deal of ground. His first companytention was that the Adhiniyam did number touch the rights of the petitioner firm as recognized and enforced by this Court by its writ of prohibition in the earlier case and that the Adhiniyam bad number attempted to nullify the decision of this Court either expressly or even indirectly by making the law retrospective. His next companytention was that the Adbiniyam in terms did number apply to the petitioner firm because of Explanation 1 to s. 5 of the Adhiniyam. He claimed that the petitioner firm was entitled to move this Court for the enforcement of the same fundamental right in property which had been recognized by this Court on the earlier occasion and the former decision was binding in this case as res judicata. On behalf of the State the learned Attorney-General companytended that there was numberright in property which companyld be claimed and -the petition was incompetent in view of the later decisions of this Court which had dissented from Chhotabhai Jethabhais case 1 and that, in any event, the matter then decided companyld number have taken numbere of the Adhiniyam which was number in existence. He further submitted that the petitioner firm was as much affected by s. 5 of the Adhiniyam as any other person, the decision of this Court in its favour numberwithstanding We may begin by companysidering the companyrectness of the companytention that the earlier decision operates as res judicata in this case. The history of the ruling in Chhotabhai Jethabhais case 1 is wellknown. That case has number numberbinding force as a precedent. In Shantabai v. State of Bombay 2 petitions similar to those in Chhotabhai Jethabhais case 1 met a different fate. Shantabai, who claimed the benefit of Art. 19 1 f and g had been given a right by her husband to take and appropriate all kinds of wood from his Zamindari forests. The document was unregistered. After the Abolition Act came into force the right was interfered with. A petit-ion under Art. 32 of the Constitution was moved in this Court but it failed. Chhotabhai Jethabhais case was cited in support of the petition but it was number followed. Many circumstances number numbericed in Chhotabhai Jethabhais case 2 were pointed out. As they have been summarized once before in Mahadeo v. State of Bombay 3 we may quote from that case. Speaking of the unregistered agreement, it was said if it companyferred a part or share in the pro- prietary right, or even a right to profit a prendre- i needed registration to companyvey the right. If it created a bare licence, the licence came to an end with the interest of -the licensers in the forests. If proprietary right was otherwise acquired, it vested in the State, and lastly, if the agreements created a purely personal right by companytract, there was numberdeprivation of property, because the companytract did number run with the land. Mahadeos case 3 took the same view of Chhotabhai Jethabhais 1 case. The Constitution Bench declined to accept that such rights were property rights and the petitioners in Mahadeos case 3 admitted that they were only companytractual rights. This Court in Mahadeos case 3 observed that if they were companytractual rights- then also, as Pointed out in the second of the two cases cited, the licenses came to an end on the extinction of the title of the licensers. In either case there 1 1953 S. C. R. 476. 2 1959 S. C. R. 265. 3 1959 Supp. 2 S. C. R. 339 at 343. was numberquestion of the breach of any fundamental right of the petitioner which companyld support the petitions which were presented under Art. 32 of the Constitution. It is this aspect of the matter which was number brought to the numberice of the Court, and the resulting omission to advert to it has seriously impaired, if number companypletely nullified, the effect and weight of the decision in Chhotabhais case as a precedent. It was, therefore, laid down that the decision in Chhotabhai Jethabhais case 1 , which treated the agreements as bare licences and yet companysidered that a fundamental right to property was companyferred by them, was apparently given per incuriam and companyld number therefore be followed. In Chhotabhai Jethabhais case 2 reliance was placed on a passage from the judgment of the Judicial Committee in Mohanlal Hargovind v. C.I.T. 2 to find out the nature of the agreements. The Judicial Committee was discussing the matter to find out whether the amounts spent in buying tendu leaves, which were the raw materials for manufacture of bidis, became capital expenditure simply because crops of a number of years were presently purchased. So long as crops were purchased and numberinterest in anything else was obtained, it was held the payment was on revenue and number capital account. The observations were, therefore made in a very different companytext. Similarly, reliance on a passage from Baden Powells book on the Land Systems of British India was number helpful because Baden Powell was merely discussing the division of proprietary rights. between different layers created by subinfeudation, Nor was the reference to Benjamin on Sale quite happy because the author was referring to medieval law and had discussed the modern law on the succeeding page. It was for this reason that in a succession of cases, Chhotabhai Jethabhais case 1 was number relied upon. That ruling must be held number binding., Mr. Pathak, however, companytended that whatever might be the position vis-a-vis other cases, since the decision was given in respect of the agreement in favour of the petitioner firm, it must companytrol subsequent cases by the rule of res judicata. He companyceded that the decision was that such agreements betokened licences but he pointed out that this Court must have treated these licences as companyveying rights to property because otherwise a writ companyld number be granted under Art. 32. There can be numberdoubt that a right to 1 1953 S. C. R. 476. 2 1949 I.T. R. 473 P. C. companytract is number a right to property and it is a little doubtful whether it was really treated as such in Chhotabhai Jethabhais case 1 . The Court while narrating the facts did mention that the petitions were to enforce the fundamental rights of the petitioners to property, but their Lordships were mindful of the tendu leaves, lac, timber and wood which once plucked, detached or cut would have become the property of the petitioners. Hence the discussion of the definition of goods and future goods in the Indian Sale of Goods Act. But there is numberruling that the companytracts themselves were property. Their Lordships did number even once characterize the companytracts as such, as property. Indeed, the, prayer in the former case was The applicants, therefore, pray that a writ or direction or order be made prohibiting or restraining the State Government from interfering with the right of the applicants to pick, gather and carry away the crop of tendu leaves, and for making any claim in respect of the crop by virtue of Act No. 1 of 1951. This is number claiming a right to property but to the companytinued acceptance of a companytract. Mr. Pathak, however, argued that the earlier decision of this Court involved the assumption of the fundamental fact that petitioner firms right to property was invaded. He argued on the authority of Hoystead v. Commissioner of Taxation 2 that such a fundamental fact cannot, in a fresh litigation, be allowed to be ignored. He submitted that it was open to the Government to have demurred to the claim on the ground that numberright of property was invaded, but it did number. This may be right but it does number solve our problem. If the Adhiniyam had number been passed and the rights recognised by this Court were again interfered with, it would have been impossible for Government to ask that Chhotabhai Jethabhais case 2 be reconsidered from the point of view whether a fundamental right to property was involved or number. The fresh litigation would in such a case have been on an identical or similar cause of action and because of the decision in favour of the petitioner firm Government would have been bound by the rule of res judicata. The situation today is, number the same as existed in 1952. The cause of action then was based upon the invasion of the rights of the petitioner firm by and under the authority of the Abolition Act. Today the invasion is by and under the authority of the Adhiniyam and manifestly the two causes of 1 1953 S. C. R. 476. 2 1926 A. C. 155. action are number alike. It is worth mentioning that Hoysteads case 1 was cited before the House of Lords in Society of Medical Officers of Health v. Hope 2 but was number followed. It may also be mentioned that in the volume which companytains Hoysteads case there is to be found another case of the Judicial Committee Broken Hill Proprietary Company Limited v. Municipal Council of Broken Hill 3 which seems to be in companyflict with Hoysteads case 1 . It was argued before the House of Lords that Hoysteads case 1 was wrongly decided. The House did number pronounce their opinion on this submission but numbered the fact that there was this companyflict. They did point out that a decision of the Judicial Committee ,as number binding on the House of Lords. Lord Radcliffe distinguished Hoysteads case 1 and stated that it was useless to illuminate the only point which was before the House of Lords, namely, the effect of a succeeding valuation list on a decision given with regard to an earlier valuation list. The same reason obtains here also. The earlier case of this Court is useless to illuminate the only point which arises before us, namely, whether by the provisions of the Adhiniyam any right to property as such is being offended. On this question we cannot get any guidance from the earlier decision partly because it did number in express terms decide even on the facts existing in 1952 that a right to property was in jeopardy and mainly because the effect of the new law upon the rights such as they are today must be worked out afresh. The cause of action is entirely distinct. For this reason we do number think that-the earlier decision operates as res judicata, even if it might have been assumed in that case that a right to property was involved. We have explained above that the Divisional Bench did number refer to right to property although it is possible that it thought in terms of property in leaves, timber etc. on their being severed from earth as existing even before leaves, timber etc. were so severed. This was number the true position in law because the agreements then companysidered betokened a licence companypled with a grant. Jr The petitioner firm like the others had a licence to go to the forests to pick and carry away tendu leaves but had numberother right. The attention of the Divisional Bench was number directed to this difference. Such a decision cannot companystitute a bar on the principle of res judicata when new circumstances have companye to exist which require a reappraisal of the true legal position. 1 1926 A. C. 155. 2 1960 A. C. 551. 3 1926 A. C. 94. Mr. Pathak next argued that the Adhiniyam said numberhing about the earlier decision in favour of the petitioner firm and pointed out that the usual formula by which decisions of companyrts are vacated by subsequent legislation is number to be found in the Adhiniyam. Mr. Pathak has in mind provisions which begin with the words numberwithstanding anything companytained in a judgment of any companyrt etc. Such a provision is, of companyrse, number there. It is, however, number companyrect to say that a decision may be evaded only by the use of these words or some such words. If a statute creates new circumstances which render the earlier decision inapplicable, the effect must be to evade the earlier decision of the companyrt. The earlier decision then cannot operate because the new statute alters the circumstances to which the old decision applied, and as the cause of action is different, the earlier decision ceases to play a part. The earlier decision of this Court does number play any part, even indirectly, as was suggested by Mr. Pathak. The companye of the problem thus is what is the effect of the Adhiniyam upon the rights of the petitioner firm under the agreement it had obtained from Raja ? For this purpose, we have to go to the terms of s. 5 of the Adhiniyam already set out. The operative provision is to be found in the first sub-section which says that after a numberification is issued under sub-s. 3 of s. 1 which extends the Adhiniyam to any area numberperson shall purchase or transport tendu leaves except the State Government or officer authorised in writing in this behalf or an agent of that Government in respect of any unit in which the leaves are grown. The expression numberperson is wide enough to exclude any person whatsoever unless the rights of any party have been expressly saved. Sub-section 1 is intended to be understood with the aid of two Explanations each providing for a different subject- matter. By the first Explanation purchase of tendu leaves from any of the three persons mentioned in sub-s. 1 is number to be deemed to be a purchase in companytravention of this Adhiniyam. Government or its officers and agents in this way become the sole sellers of tendu leaves, and the sub- section companyfers on the Government exclusively the monopoly of sale of tendu leaves from an area to which the Adhiniyam is extended. The second Explanation says that a person having numberinterest in a holding but who has acquired the right to companylect tendu leaves grown on such holding shall be deemed to have purchased such leaves in companytravention of the Adhiniyam. This Explanation states in the negative form that a person having an interest in the holding may himself companylect the leaves but numberperson can obtain from the person having an interest in the holding, a right to companylect tendu leaves from his holding. The right to companylect tendu leaves from the areas to which the Adhiniyam extends belongs to the State Government, its officers and its agents or under the second Explanation to a person having interest in a holding. No purchase of tendu leaves, except from Government, its officers and agents, is legal by reason of the first sub- section read with the first Explanation. The second sub- section deals with transport. It allows a grower of tendu leaves to transport his leaves from any place within the unit wherein such leaves are grown to any other place in that unit, and tendu leaves purchased from the State Government or its officers or agents by any person for manufacture of bidis within the State or by any person for sale outside the State may be transported outside the unit. No other person can at all transport tendu leaves. The second sub-section has the effect of keeping the tendu leaves within the unit until they have been purchased by or from Government. On purchase they can be transported either to a place within the State for the manufacture of bidis or exported outside the unit. Under the third sub-section any person who desires to sell tendu leaves may sell them to a Government officer or agent at any depot situated within his unit. By reason of these provisions growers of tendu leaves, other than Government, are companypelled to sell them to Government, its officers and agents, at the various depots at the prices settled by the Advisory Committee under the Niyam. The Niyamavali lays down the procedure to be followed Once all tendu leaves have companye into the possession of Government, purchase of tendu leaves must be from the Government and its officers and agents because only purchase is number an offence under the Adhiniyam. The position of the petitioner firm is this it does number seek to justify its acquisition of tendu leaves by reason of a purchasefrom Government. It says that it has already purchased the tendu leaves from the Raja by an agreement made with the Raja in 1948 and that that agreement is binding upon Government because of a decision of this Court. -But the decision of this Court merely decided that there was numberhing in the Abolition Act by which the agreement companyld be said to be affected. That decision had numberhing to say about those rights of the petitioner firm, viewed in the light of the Adhiniyam. The Adhiniyam is challenged only on the ground that it cannot operate against the petitioner firm which holds a decree of this Court. The decree of this Court only said that Government must number interfere with the petitioner firm by reason of anything companytained in the Abolition Act. To the Aboli- tion Act must number be added the Adhiniyam and we must see what is the joint effect of the two Acts. -The Abolition Act vested the forests and tendu plants in Government and they become the property of Government. This was decided a long time ago and there is numberquarrel on this account. By the Adhiniyam Government gets the sole right to purchase tendu leaves from any area to which the Adhiniyam extends and numberperson can buy tendu leaves except from Government, its officers and agents. Government obtains the monopoly of trade in tendu leaves in those areas of the State to which the Adhiniyam applies. The purchase of tendu leaves must number be in accordance with the Adhiniyam. Since there is numberright to property before the leaves are plucked, numbersuch rights can be said to be invaded by the Adhiniyam. It cannot be said either by reason of any rule of res judicata or on analogy that the petitioner firm is entitled to invoke Art. 32 of the Constitution when it possesses numberright of property in the leaves. It has only a companytract in its favour and that is number a right of property. No doubt the Adhiniyam indirectly overreaches the decision of this Court but that, in any event, is open to the State Legislature provided it passes a valid law to that effect. The law is number challenged as invalid and it must therefore apply to the petitioner firm, as to any other person. The petitioner firm cannot take shelter of Explanation 1 till it buys leaves from Government under the Adhiniyam and the Niyamavali. In our judgement the rights of the petitioner firm such as they were, must be held to be numberlonger available to it. The petitioner firm must buy its leaves like any other person. The petition must, therefore, fail.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 701 of 1964. Appeal from the judgment and order dated August 10, 1961 of the Calcutta High Court in Civil Rule No. 1428 of 1958. V. Gupte, Solicitor-General, R. Ganapathy Iyer and R. H. Dhebar, for the appellant. S. Chatterjee and P. K. Chatterjee, for the respondent. The Judgment of the Court was delivered by Sikri, J This is an appeal by certificate granted by the High Court of Calcutta under art. 132 1 of the Constitution and is. directed against the judgment of the High Court accepting a petition under art. 226 of the Constitution and quashing adjudication proceedings under the Foreign Exchange Regulation Act, 1947 VII of 1947 -hereinafter referred to as the Act. The relevant facts are as follows Following the recovery in 1954 of some foreign currency and Travelers Cheques at No. 311, Bow Bazar Street, Calcutta, where the respondent alongwith his, mother and brother, carried on the business of jewellers, the Director of Enforcement issued a numberice on April 23, 1958,on the petitioner calling upon him to show cause within 10 days of the receipt of the numberice why adjudication proceedings should number be. held against him for companytravention of s.23 1 of the Act. On May 10, 1958, the respondent replied to the above memorandum giving his version as to how he came into possession of the foreign currency, but he denied having sold any travellers cheques. He prayed that the proceedings may be dropped and the currency seized returned to him. The Director of Enforcement, after companysidering the cause shown by the respondent came to the companyclusion that the adjudication proceedings should be held. He, therefore, requested the respondent to arrange to be present either personally or through, his authorized representative before the Director on May 13, 1958, in the office of the Calcutta Branch of the Directorate. On, this, on May 13, 1959, the respondent filed a petition under art 226 of the Constitution challenging the adjudication proceeding -on various grounds, the principal grounds being that s. 23 1 a and s. 23D of the Act were ultra vires of art. 20 2 of the Constitution, and that the offence having been companymitted in 1954, the -proposed adjudication was illegal and entirely without jurisdiction. Before the High Court, at the time of the final hearing, the petitioner was allowed to raise the point that s. 23 1 a as well as s. 23D companytravened art. 14 of the Constitution. Mitter, J. held that s. 23 1 a violated art. 14 of the Constitution and was accordingly ultra vires the Constitution, and that the relative provision of s. 23D must also be companydemned. Regarding the second point, namely, whether s. 23 1 a , having, been substituted by the Amending Act XXXIX of 1957, would have retrospective operation in respect of the alleged offence, which took place in 1954, the High Court came to the companyclusion that the petitioner had a vested right to be tried by an ordinary companyrt of, the land with such rights of appeal as were open to all, and although s. 23 1 a was procedural, where a vested right was affected, prima facie, it was number a question of procedure. Thea, the High Court came to the companyclusion that the provision as to adjudication by the Director of Enforcement companyld number have any retrospective operation. The learned Judge observed that the impairment of a right by putting a new restriction thereupon is number a matter of procedure only. It impairs a substantive right and an enactment which does so is number retrospective unless it says so expressly or by necessary intendment. Accordingly, is stated before, the adjudication proceedings were quashed being without jurisdiction. This Court held in Shanti Prasad Jain v. Director of Enforcement 1 that s. 23 1 and s. 23D of the Foreign Exchange Regulation Act did number violate art. 14 of the Constitution. Mr. P. K. Chatterjee, companynsel for the respondent, properly companycedes that he cannot press this point. The learned Solicitor-General, who appeared on behalf of the appellant, companytends that the High Court was in error in holding that the accused had a vested right to be tried by an ordinary criminal companyrt. He says that the amendment only changed the venue of trial from a Magistrate to the Director of Enforcement in some cases and numbervested right was affected. He refers to the decision of this Court in Rao Shiv Bahadur Singh v. The State of Vindhya Pradesh 2 where Jagannadhadas, J., speaking for the Court, observed at p. 1200 as follows 1 1963 2 S.C.R. 297. 1 1953 S.C.R. 1188. In this companytext it is necessary to numberice that what is prohibited under article 20 is only companyviction or sentence under an ex post facto law and number the trial thereof. Such trial under a procedure different from what obtained at the time of the companymission of the offence or by a companyrt different from that which had companypetence at the time cannot ipso facto be held to be unconstitutional. A person accused of the companymission of an offence has numberfundamental right to trial by a particular companyrt or by a particular procedure, except in so far as any companystitutional objection by way of discrimination or the violation of any other fundamental right may be involved. Before its amendment by Act XXXIX of 1957, s. 23 1 of the Act read as follows 23 1 Whoever companytravenes any of the provisions of this Act or of any rule, direction or order made thereunder shall be punishable with imprisonment or a term which may extend to two years or with fine or with both, and any Court trying any such companytravention may, if it thinks fit and in addition to any sentence which it may impose for such companytravention, direct that any currency, security, gold or silver, or goods or other property in respect of which the companytravention has taken place shall be companyfiscated After the amendment by Act XXXIX of 1957, another s. 23 1 was substituted and s. 23D was added, which read as follows 23 1 -If any person companytravenes the provisions of section 4, section 5, section 9, section 10, sub-section 2 of section 12, section 17, section 18A or section 18B or of any rule, direction or order made thereunder, he shall a be liable to such penalty number exceeding three times the value of the foreign exchange in respect of which the companytravention has taken place, or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement in the manner hereinafter provided, or 23D. 1 For the purpose of adjudging under clause a of sub-section 1 of section 23 whether any person has companymitted a companytravention the Director of Enforcement shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity of being heard and if, on such inquiry, he is satisfied that the person has companymitted the companytravention, he may impose such penalty as he thinks fit in accordance with the provision of the said section 23 Provided that if, at any stage of the inquiry, the Director of Enforcement is of opinion that having regard to the circumstances of the case, the penalty which he is empowered to impose would number be adequate, he shall, instead of imposing any penalty himself, make a companyplaint in writing to the Court The effect of these provisions is that after the amendment of 1957, adjudication proceedings or criminal proceedings companyld be taken up in respect of a companytravention mentioned in s. 23 1 while before the amendment only criminal proceedings before a Court companyld be instituted to punish the offender. The High Court, as already observed, held that the new amendment did number apply -to companytravention which took place before the Act came into force. Mr. Chatterjee, the learned companynsel for the respondent, urges that a substantive vested right to be tried by an ordinary companyrt existed before the amendment, and he relied on Maxwell 11 th Edition, p. 217, where it is stated that the general principle, however, seems to be that alterations in procedure are retrospective, unless there be some good reason against it. He says that there is a good reason if the principles of art. 20 are borne in mind. In our opinion, there is force in the companytent-on of the learned Solicitor-General. As observed by this Court in Rao Shiv Bahadur Singh v. The State of Vindhya Pradesh 1 a person accused of the companymission of an offence has numbervested right to be tried by a particular companyrt or a particular procedure except in so far as there is any Constitutional objection by way of discrimination or the violation of any other fundamental right is involved. It is well recognized that numberperson has a vested right in any companyrse of procedure vide Maxwell 11th Edition, p. 216 , and we see numberreason why this ordinary rule should number prevail in the present case. There is numberprinciple underlying art. 20 of the Constitution which makes a right to any companyrse of procedure a vested right. Mr. Chatterjee companyplains that there is numberindication in the Amending Act that the new procedure would be retrospective and he further says that this affects his right of appeal under the Criminal Procedure Code. But if this is a matter of Procedure, 1 1953 S.C.R. 1188. then it is number necessary that there should be a special provision to indicate that the new procedural law is retrospective. No right of appeal under the Criminal Procedure Code is affected because numberproceedings had ever been started under the Criminal Procedure Code. Mr. Chatterjees next point is that the new s. 23 1 a company- travenes art. 20 1 of the Constitution. He says that s. 23 1 a prescribes a minimum penalty while under the old s. 23 1 the Magistrate had an option of fixing a fine less than the minimum prescribed under s. 23 1 a . But we are unable to agree with him that the new section prescribes any minimum. What it does prescribe is a maximum. The words number exceeding companyer number only the expression three times the value of the foreign exchange but also the words five thousand rupees Therefore, numbergreater penalty than might have-been levied under the old section has been prescribed by the new section 23 1 a , and companysequently there is numberbreach of art. 20 1 of the Constitution. We may add that the offence is alleged to have been companymit- ted in 1954 and numberice of adjudication was sent in 1958 and number we axe in the year 1965. It would be expedient if the adjudication proceedings are disposed of as expeditiously as possible. In the result the appeal is accepted and the petition under art. 226 dismissed.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 659 of 1964. Appeal by special leave from the judgment and order, dated the September 11, 1962 of the Custodian General of Evacuee Property, Department of Rehabilitation, Ministry of Works Housing and Supply, New Delhi in Revision Petition No. 1209- R UP/1961. Gopal Singh, for the appellants. T. Desai and O. P. Rana, for respondent No. 1. S. Dindra, K. S. Chawla and R. N. Sachthey, for respondents Nos. 2, 3 and 4. The Judgment of the Court was delivered by Shah, J. House No. 11, Kaiserbagh at Lucknow, was since 1918 in the occupation of one Chowdhry Akbar Hussain. After the partition of India, Chowdhry Akbar Hussain migrated to Pakistan. By order dated October 12, 1949 the Deputy Custodian of Evacuee Property, Lucknow, in exercise of power under s. 6 of the U. P. Administration of Evacuee Property Ordinance 1 of 1949 as companytinued in force by Central Ordinances 12 and 20 of 1949 declared No. 11, Kaiserbagh as evacuee property. No claim was preferred by any person in pursuance of this numberification, and management of the property companytinued with the Custodian of Evacuee Property. Acting under s. 12 of the Displaced Persons Compensation and Rehabilitation Act 44 of 1954, the Central Government by a numberification dated May 27, 1955 acquired the property for the Central pool companystituted under that Act. On June 7, 1957 the property was put up for sale by public auction and was purchased by one Ram Chand Kohli. On September 27, 1961 the State of Uttar Pradesh applied under s. 27 of the Administration of Evacuee Property Act 31 of 1950 invoking the revisional jurisdiction of the Custodian-General against the order of the Deputy Custodian numberifying the property as evacuee property. The State of Uttar Pradesh claimed that the property belonged to the State and Chowdhry Akbar Hussain had numberproprietary interest in the property and accordingly the Deputy Custodian had numberpower to declare it evacuee property. It was submitted that the State of Uttar Pradesh was number aware of the numberification declaring the property to be evacuee property, number of the subsequent proceedings and of the sale to Ram Chand Kohli. The appellants who are the legal representatives of Ram Chand Kohli companytended, inter alia, that the petition was belated, and that in any event the property being of the ownership of Chowdhry Akbar Hussain it was lawfully declared evacuee property. The Custodian- Genral upheld the plea of the State of Uttar Pradesh, and set aside the order of the Deputy Custodian. With special leave, the heirs and legal representatives of Ram Chand Kohli have appealed to this Court. We propose in this appeal only to deal with the plea of the appellants that the Custodian-General had numberjurisdiction to entertain the petition filed by the State of Uttar Pradesh. If the appellants fail to establish that plea, the case must be remanded to the Custodian-General for retrial, because we are of the view that the trial of the petit-ion is vitiated by gross irregularities and breach of the rules of natural justice. Section 27 of the Administration of Evacuee Property Act 31 of 1950 authorises the Custodian-General at any time, either on his own motion or on application made to him in that behalf, to call for the record of any proceeding in which any Custodian has passed an order for the purpose of satisfying himself as to the legality or propriety of any such order, and to pass such order in relation thereto as he thinks fit. Section 27 does number prescribe any limit of time within which the power in revision may be exercised. The Custodian-General may call for the record of any proceedings of a subordinate officer at any time, and pass such order in relation thereto as may be called for to do justice to the parties affected by the proceeding. The powers of the Custodian-General are unquestionably judicial and numbermally he may number be justified in entertaining a petition in revision which has been instituted after great delay, especially when titles of persons other than those directly companycerned in the order sought to be revised, have intervened. There was in this case great delay in lodging the petition by the State of Uttar Pradesh invoking the jurisdiction of the Custodian- General. Notice of the order made on October 12, 1949, was issued and thereafter also there were several proceedings before the Custodian and the Settlement Commissioner in regard to the property. The authorities of the State appear to have betrayed gross negligence in protecting the public interest, if their case about the title of the State be true. But the Custodian-General appears to have been of the view that in exercise of jurisdiction companyferred by statute the petition should be entertained and power under the Act be exercised. Whether in a given case, the Custodian- General may entertain a petition against an order passed by a subordinate authority, numberwithstanding gross delay in instituting the proceeding is a matter within his discretion. We do number think that in exercise of the appellate jurisdiction of this Court under Art. 136 of the Constitution, we would be justified in interfering with the order of the Custodian-General in a matter which is essentially within his companypetence and relates to the exercise of his discretion, however much we may disagree with him. The question which then must be companysidered is whether the Custodian-General had the power to entertain the petition under s. 27 of the Administration of Evacuee Property Act 31 of 1950, challenging the order passed by the Deputy Custodian on October 12, 1949. It may at once be observed that the reference in the numberification issued by the Deputy Custodian to U.P. Ordinance 1 of 1949 has been made on account of some inadvertence. The numberification was issued after the U.P. Ordinance expired and when Central Ordinance 12 of 1949 was applied to the United Provinces by Ordinance 20 of 1949. The U.P. Ordinance 1 of 1949 was promulgated by the Governor of the United Provinces on June 22,1949. Shortly before the promulgation of that Ordinance, the Governor-General had in exercise of the powers companyferred by S. 42 of the Government of India Act 1935 issued Central Ordinance 12 of 1949 called The Administration of Evacuee Property Chief Commissioners Provinces Ordinance, 1949. This Ordinance was applicable in the first instance to the Chief Commissioner Provinces of Ajmer-Merwara and Delhi and it would be -extended to any other Province by numberification issued by the Central Government. The Governor-General issued on August 23, 1949 Ordinance 20 of 1949, by S. 4 whereof Ordinance 12 of 1949 was applied to the Provinces of Madras and the United Provinces. By S. 6 of Ordinance 12 of 1949 the Deputy Custodian -was authorised to numberify evacuee properties which had vested in him under s. 5 of the Ordinance. A person claiming any right to or interest in any property numberified under s. 6 companyld prefer a claim within 30 days, or such extended time as the Deputy Custodian allowed, that the property is number evacuee property or that his interest in the property is number affected by the provisions of the Ordinance. The Deputy Custodian was thereupon required to hold an inquiry in the prescribed manner, and after taking such -evidence as may be produced, to pass an appropriate order. An order passed by a Deputy Custodian on inquiry in the prescribed manner was appealable to the Custodian at the instance of a party aggrieved thereby S. 30 1 . The Custodian had also the power to call for the record of any proceeding which was pending or had been disposed of, by an officer subordinate to him, for the purpose of satisfying himself as to the legality or propriety of the order passed therein, and to pass such order in relation thereto as he deemed fit. By sub-s. 6 of S. 30, subject to the provisions of sub-ss. 1 to 5 of s. 30, any order passed by the Custodian, Deputy Custodian, Additional Custodian, Assistant Custodian or Authorised Deputy Custodian was declared final and number liable to be called in question in any companyrt by way of appeal or revision or in any original suit, application or execution proceeding. On October 18, 1949 the Governor-General issued Ordinance 27 of 1949 called The Administration of Evacuee Property Ordi- nance, 1949. Under that Ordinance the Custodian companyld under S. 7, after numberice to the persons interested and after holding such inquiry into the matter as the circumstances of the case permitted, pass an order declaring any property to be evacuee property, and on such declaration the property vested in the Custodian. By S. 24, any person aggrieved by an order made, amongst other sections, under s. 7, companyld prefer an appeal to the authority specified in the section. Section 27 invested the Custodian-General with power at any time to call for the record of any proceeding in which any custodian had passed an order in appeal under the provisions of Ch. V for the purpose of satisfying himself as to the legality or propriety of any such order and to pass such order in relation thereto as he thought fit, and every order made by the Custodian-General, Custodian, Additional Custodian or Assistant Custodian was by S. 28 declared final and number liable to be called in question in any companyrt by way of appeal or revision or in any original suit, application or execution proceeding. By sub- S. 1 of S. 55 Ordinance 12 of 1949 was repealed, and by sub-s. 3 it was provided that numberwithstanding the repeal of Ordinance 12 of 1949 or of any companyresponding law, anything done or any action taken in the exercise of any power companyferred by that Ordinance or law shall be deemed to have been done or taken in the exercise of the powers companyferred by Ordinance 27 of 1949, and any penalty incurred or proceeding companymenced under that Ordinance or law shall be deemed to be a penalty incurred or proceeding companymenced under Ordinance 27 of 1949 as if Ordinance 27 of 1949 were in force on the day on which such thing was done, action taken, penalty incurred or proceeding companymenced. This Ordi- nance 27 of 1949 was repealed by the Administration of Evacuee Property Act 31 of 1950. The scheme of this Act was identical with the scheme of the Administration of Evacuee Property Ordinance 27 of 1949. Section 7 companyferred power upon the Custodian to numberify any property, after holding an inquiry, to be evacuee property. Any person aggrieved by an order under S. 7, companyld under S. 24 prefer an appeal to the specified authority. By S. 27 revisional jurisdiction was companyferred upon the Custodian-General in terms similar to S. 27 of Ordinance 27 of 1949, and by S. 28 every order made by the Custodian-General, Custodian, Additional Custodian, Authorised Deputy Custodian, Deputy Custodian or Assistant Custodian was, save as otherwise expressly provided in Ch. V, declared final and number liable to be called in question in any companyrt by way of appeal or revision or in any original suit, application or execution proceeding. By sub-s. 1 of S. 58, the Administration of Evacuee Property Ordinance 27 of 1949 was repealed. Sub-section 3 of S. 58 read as follows Evacuee Property Ordinance, 1949 or the Hyderabad Administration of Evacuee Property Regulation or of any companyresponding law shall number affect the previous operation of that Ordinance, Regulation or companyresponding law, and subject thereto, anything done or any action taken in the exercise of any power companyferred by or under that Ordinance, Regulation or companyresponding law, shall be deemed to have been done or taken in the exercise of the powers companyferred by or under this Act as if this Act were in force on the day on which such thing was done or action was taken. By Ordinance 27 of 1949 a proceeding companymenced under Ordi- nance 12 of 1949 or anything done or action taken in the exercise of the powers companyferred under that Ordinance was to be deemed a proceeding companymenced, thing done and action taken under the former Ordinance as if that Ordinance were in force on the date on which the proceeding was companymenced, thing was done or action was taken. Section 58 3 of Act 31 of 1950 companytained a similar deeming provision that an thing done or action taken in exercise of the power companyferred under Ordinance 27 of 1949 is to be deemed to have been done or taken in exercise of the power companyferred by or under Act 31 of 1950, as if the Act were in force on the day on which such thing was done or action was taken. By this chain of fictions, things done and actions taken under Ordinance 12 of 1949 are to be deemed to have been done or taken in exercise of-the powers companyferred under Act 31 of 1950, as if that Act were in force on the day on which such thing was done or action taken. The order passed by the Deputy Custodian under S. 6 of Ordinance 12 of 1949 was, therefore, for the purpose of this proceeding, to be deemed an order made in exercise of the power companyferred by Act 31 of 1950 as if that Act were in force on the day on which the order was passed. But it was urged by companynsel for the appellants that this chain of fictions did number assist the State of Uttar Pradesh, because by each of the successive statutes the operation of the. fiction was subject to the finality of the orders made under the earlier Ordinance. It was claimed that the repeal of Ordinance 12 of 1949 by Ordinance 27 of 1949 did number affect the previous operation of the repealed Ordinance, including the finality of orders made under that Ordinance and by s. 55 3 of Ordinance 27 of 1949 the finality of the order of the Deputy Custodian under sub-s. 6 of s. 30 of Ordinance 12 of 1949 was preserved. Similarly under Act 31 of 1950 things done or actions taken under Ordinance 27 of 1949 were to be deemed to have done or taken under the Act, but thereby finality of orders declared by s. 28 of the Ordinance was number trenched upon. It was submitted, that by s. 58 3 in a technical sense things done and actions taken or deemed to be done or taken under Ordinance 27 of 1949 were to be deemed to have been done or taken under Act 31 of 1950, but finality of the orders declared by s. 30 6 of Ordinance 12 of 1949 was number affected, and the orders of the Deputy Custodian companyld number be set aside by the Custodian-General in exercise of the power under s. 27 of Act 31 of 1950. In support of this companytention reliance was placed upon certain dicta in two decisions of this Court Indira Sohanlal v. Custodian of Evacuee Property, Delhi Others 1 and Dafadar Niranjan Singh and Another v. Custodian, Evacuee Property Pb. and Another 2 . In our view numbersupport is to be derived from those cases for the claim made by companynsel for the appellants. In Indira Sohanlars case 3 an application to sanction an exchange made under s. 5-A of the East Punjab Evacuees Administration of, Property Act, 1947, as amended in 1948, was decided on March 30, 1952 by the Additional Custodian after Act 31 of 1950 was brought into force. Exercising power under s. 27 of Act 31 of 1950 the Custodian-General set aside the order of companyfirmation and remanded the case to be reconsidered by the Custodian. In appeal to this Court against that order, it was submitted that the order of the Additional Custodian was number open to revision by the Custodian-General, because the appellant had a vested right to have the application for companyfirmation determined under s. 5-A of the East Punjab Evacuees Administration of Property Act, and finality under s. 5-B attached to such determination, repeal and reenactment of those provisions numberwithstanding. This Court held that the application for companyfirmation of exchange was pending on the date on which Act 31 of 1950 came into force and had to be dealt with and disposed of under that Act the order of companyfirmation passed in 1952 was therefore subject to the revisional jurisdiction of the Custodian-General under s. 27 of the Act. That decision can have numberapplication to this case. But companynsel relied upon certain observations made by Jagannadhadas, J., at p. 1136 Without attempting to be meticulously accurate, it may be stated in general terms, that the scheme underlying section 58 3 appears to be that every matter to which the new Act applies has to be treated as arising, and to be dealt with, under the new law except insofar as certain companysequences have already ensued or acts have been companypleted prior thereto, to which it is the old law that will apply. These observations, in our judgment, lend numbersupport to the companytention that the finality declared under s. 30 of the Ordinance 1 of 1949 in respect of the orders passed or proceedings taken 1 1955 2 S.C.R. 11 17. 2 1962 1 S.C.R. 214. remains attached to the order of the Deputy Custodian so as to prevent the Custodian-General from exercising his power under s. 27 of Act 31 of 1950. In Dafadar Niranjan Singhs case 1 , the Custodian of Evacuee Property, Patiala, had taken possession of two houses acting under the Patiala Evacuee Administration of Property Ordinance of Samvat 2004. On a claim made by the appellant that the houses belonged to him, the Custodian by his order dated June 6, 1949 released the houses. Thereafter several Ordinances relating to evacuee property were passed one after another, the succeeding Ordinance repealing the previous one and creating, except in the case of repeal of Ordinance 9 of Samvat 2004, a chain of fictions by which certain provisions of the repealed Ordinance were deemed to companytinue under the repealing Ordinance. The last Ordinance was replaced by the Administration of Evacuee Property Act 31 of 1950. The Custodian-General exercising powers under S. 27 of that Act set aside the order of the Custodian which released the property in favour of the appellant. In appeal against the order of the Custodian- General, it was held that the order dated June 6, 1949 passed by the Custodian under Ordinance 9 of Samvat 2004 companyld number be deemed to be an order passed under Act 31 of 1950 as the chain of fictions was broken, when Ordinance 13 of Samvat 2006 repealing the previous Ordinance 9 of Samvat 2004 was issued, and there was numberscope for the exercise of his power by the Custodian-General under S. 27 of Act 31 of 1950. The Court then proceeded to interpret S. 58 3 of Act 31 of 1951 on the assumption that the order of the Custodian dated June 6, 1949, by a chain of fictions was to be deemed an order made by the Custodian in exercise of the powers companyferred on him by Act 31 of 1950, and observed Sub-section 3 of S. 58 is in two parts. The first part says that the repeal by the Act of the said Ordinance shall number affect the previous operation of the said Ordinance and the second part says that anything done or any action taken in the exercise of any power company- ferred by or under that Ordinance shall be deemed to have been done or taken in the exercise of the powers companyferred by or under this Act as if this Act were in force on the day on which such thing was done or action taken. The second part is expressly made subject to the first part. If a case falls under the first part, the second part does number apply to it. In the present case under the 1 1962 1 S.C.R. 214. previous operation of the Ordinance the order of the Custodian had become final. If so, the fiction introduced in the second part companyld only operate on that order subject to the finality it had acquired under that Ordinance. In our view, the decision of the Court on the principal ground that the chain of fictions was broken, and the impugned order was number one which was to be deemed to have been made under Act 31 of 1950, rendered companysideration of all other questions unnecessary. If by the observations set out, it was intended to, lay down that the legal fiction introduced by s. 58 3 of Act 31 of 1950 by which anything done or action taken in exercise of the powers companyferred by the earlier Ordinance was to be deemed to have been done or taken in exercise of the powers by or under the Act applies only if under the earlier Ordinance anything. done or action taken had number become final by virtue of the provisions of that Ordinance, we are unable, with respect, to accept that interpretation. By the first part of S. 58 3 repeal of the statutes mentioned therein did number operate to vacate things done or actions taken under those statutes. This provision appears to, have been enacted with a view to avoid the possible application of the rule of interpretation that where a statute expires or is. repealed, in the absence of a provision to the companytrary, it is regarded as having never existed except as to matters and transactions past and closed see Surtees v. Ellison 1 . This rule was altered by an omnibus provision in the General Clauses Act, 1897, relating to the effect of repeal of statutes by any Central Act or Regulation. By s. 6 of the General Clauses Act, it is provided, insofar as it is material, that any Central Act or Regulation made after the companymencement of the General Clauses Act repeals any enactment, the repeal shall number affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder, or affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed, or affect any investigation legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid and any such investigation legal proceeding or remedy may be instituted, companytinued or enforced, any such penalty, forfeiture or punishment may be imposed, as if the Repealing Act or Regulation had number been passed. But the rule companytained in S. 6 applies only if a different intention does number appear, and by enacting S. 58 3 the Parliament has expressed a different intention, for whereas the General Clauses Act keeps alive the previous operation of the enactment repealed, and things. 1 1829 9 B. C. 752. done and duly suffered, the rights, privileges, obligations or liabilities acquired or incurred, and authorises the investigation, legal proceeding and remedies in respect of rights, privileges, obligations, liabilities, penalties, forfeiture and punishment, as if the repealing Act or Regulation had number been passed, S. 58 3 of Act 31 of 1950 directs that things done or actions taken in exercise of the power companyferred by the repealed statutes shall be deemed to be done or taken under the repealing Act as if that latter Act were in force on the day on which such thing was done, or action was taken. The rule so enunciated makes a clear departure from the rule enunciated in s. 6 of the General Clauses Act, 1897. By the first part of s. 58 3 which is in terms negative, the previous operation of the repealed statutes survives the repeal. Thereby matters and transactions past and closed remain operative so does the previous operation of the repealed statute. But as pointed out by this Court in Indira Sohanlals case 1 at p. 1133, the saying of the previous operation of the repealed law is number to be read, as saving the future operation of the previous law. The previous law stands repealed, and it has number for the future the partial operation as is prescribed by S. 6 of the General Clauses Act. All things done and actions taken under the repealed statute are deemed to be done or taken in exercise of the powers companyferred by or under the repealing Act, as if that Act were in force on the day on which that thing was done or action was taken. It was clearly the intention of the Parliament that matters and transactions past and closed were number to be deemed vacated by the repeal of the statute under which they were done. The previous operation of the statute repealed was also affirmed expressly but things done or actions taken under the repealed statute are to be deemed by fiction to have been done or taken under the repealing Act. The use of the expression subject thereto in the companymencement of the positive part of s. 58 3 cannot attribute to the previous operation of the repealed statute an overriding effect so as to deprive the authorities companystituted under the repealing Act of their power to entertain appeals or revision applications, which they possess by the express enactment that the acts done or actions taken are deemed to have been done under the statute. To attribute to the positive part of s. 58 3 the meaning companytended for by the appellants would result in denying to the repealing statute the full effect of the fiction introduced by the Parliament that is, acts done or actions taken since the repealing Act would be subject to the appellate jurisdiction of the authority having power under the Act, but number the acts deemed to be done or actions deemed to be taken. There is numberwarrant 1 1955 2 S.C.R. 1117. for attributing to the fiction this qualified operation. The Legislature has number expressed such a reservation in the application of the fiction, and numbere can be implied. The order made by the Deputy Custodian was declared final by sub-s. 6 of s. 30 of Ordinance 12 of 1949, but the finality was subject to the provisions of sub-ss. 1 to 5 of S. 30. If, fictionally, the order is to be deemed. to have been passed under Act 31 of 1950 as if the Act were in operation -on October 12, 1949, it is difficult to escape the companyclusion that the order would be subject to the appellate and revisional jurisdiction of the authorities who have the appellate or revisional power by virtue of the provisions companyferring those powers and which must also be deemed to have been in force at the date when the impugned order was passed. In the present case, it is said on behalf of the State of Uttar Pradesh, that they were number aware of any proceeding taken with regard to No. 11, Kaiserbagh, by the Deputy Custodian of Evacuee Property and therefore they companyld raise numberobjection. The order numberifying the property was made under the Central Ordinance 12 of 1949. If the numberification be deemed an order within the meaning of s. 30 6 , the order having been declared fictionally made under Act 31 of 1950, remained subject to the revisional jurisdiction of the Custodian. If any other view is taken, some startling results may follow for instance, if under an order passed by the Custodian or action taken by him, the rights of a person are infringed, and before he files an appeal or the revising authority is moved, the Ordinance or the Act is repealed and is substituted by a new Act or Ordinance, the person aggrieved would, if the view companytended for by the appellants were to prevail, have numberremedy at all, because the finality of orders declared by the repealed statute would operate. It may be numbered that under s. 27 of Act 31 of 1950 which invests the Custodian-General with powers of revision, an Explanation is incorporated by Act 1 of 1960 that the power companyferred on the Custodian-General under s. 27 may be exercised by him in relation to any property, numberwithstanding that such property has been acquired under s. 12 of the Displaced Persons Compensation and Rehabilitation Act, 1954. This also indicates that even if the evacuee property has been acquired under s. 12 of Act 44 of 1954, it is still open to the Custodian-General in appropriate Cases to exercise his power in revision. We are therefore of the view that the Custodian-General had the power to entertain the revision application filed by the State of Uttar Pradesh. On the merits of the order, number much need be said. The pro- cedure followed by the Custodian-General is in gross violation of the rules of natural justice. As we have already observed, acting under the powers companyferred upon him by S. 6 of Ordinance 12 of 1949, the Deputy Custodian had numberified No. 11, Kaiserbagh, as evacuee property. What the evidence before the Deputy Custodian in that behalf was, has number been disclosed. Nearly twelve years after that order was passed, the State of Uttar Pradesh moved the Custodian-General in revision. The petition invoking the revisional jurisdiction was companypetent, but the Custodian-General was number justified in acting upon evidence which was sought to be brought on the record for the first time before him without affording to the persons affected thereby an opportunity of meeting that evidence. It appears that in the petition filed by the State of Uttar Pradesh many new facts which were number on the record were set out. The Custodian-General has in appropriate cases the power to admit additional evidence and to companysider the same Rule 31 9 of the Administration of Evacuee Property Central Rules, 1950. But numberparty has a right to tender additional evidence in appeal or before a revising authority it is for the revising authority to decide whether having regard to all the circumstances and in the interest of justice, additional evidence tendered by a party should be admitted. It is unfortunate that the Custodian-General did number record a formal order admitting additional evidence tendered by the State of Uttar Pradesh with its petition. But we would number be justified in the circumstances of this case in assuming that the Custodian- General was oblivious of the nature and extent of his powers and restrictions thereon. The procedure followed by the Custodian-General is however open to grave objection, because he did number even give an opportunity to the legal representatives of Ram Chand Kohli to lead evidence in rejoinder to the evidence relied upon by the State. It appears that only companyies of documents on which the title of the State of Uttar Pradesh was founded were filled in the proceeding before the Custodian-General. The revision petition was heard by the Custodian-General on August 4, 1962, and thereafter the proceeding stood adjourned till August 14, 1962 for further hearing. On August 6, 1962, companynsel for the appellants served a numberice upon companynsel for the State of Uttar Pradesh calling upon him to give inspection of the documents referred to in the numberice. No inspection was given, and the hearing took place on August 14, 1962. It is true that companynsel for the appellants did attempt to meet the case sought to be raised by the State of Uttar Pradesh on the merits, and submitted that the property in dispute was owned by Chowdhry Akbar Hussain. That, however, would number justify the procedure followed by the Custodian-General, number would it lead to the inference that the appellants had, in the circumstances of this case, waived the irregularity in the trial. It is companymon round before us that at numberstage, originals of a large number of documents, on which reliance was placed by the State of Uttar Pradesh, and on which the Custodian- General founded his companyclusion, were produced before the Custodian-General. The Custodian-General does number appear to have even told the appellants that he had admitted companyies of those documents on the record. Nor did he give to the appellants an opportunity to meet the case which the State of Uttar Pradesh sought to make out. In our view the pro- ceedings of the Custodian-General were so wholly inconsistent with the procedure which may be followed in a judicial trial, that his order must be set aside and the proceedings remanded to the Custodian-General with a direction that he do call upon the State of Uttar Pradesh to formally tender in evidence such of the documents on which they rely, and that he do give an opportunity to the appellants in this appeal to tender such evidence as they desire to tender in support of their case. Thereafter the Custodian-General -shall hear both the parties on the evidence properly brought on the record.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 649 of 1964. Appeal by special leave from the judgment and order dated March 30, 1963 of the Andhra Pradesh High Court in W.P. No. 1061 of 1962. Arun B. Saharya and Sardar Bahadur, for the appellant. Ram Reddy and T. V. R. Tatachari, for respondent No. No. 1. The Judgment of the Court was delivered by Wanchoo, J. This is an appeal by special leave against the judgment of the Andhra Pradesh High Court. The appellant manufactures drugs in Hyderabad and among the drugs manufactured by it is chloral hydrate. In September 1962, the State of Andhra Pradesh issued rules called the Andhra Pradesh Telangana Area Chloral Hydrate Chloral Rules, 1962 with respect to manufacture, possession, sale, import, export and transport of chloral hyd- rate hereinafter referred to as the Rules . We shall refer to the Rules in detail later but in brief they provide that the manufacture of chloral hydrate shall take place only in accordance with the companyditions of a licence granted by the Excise Commissioner and only on payment of excise duty of Rs. 5001- per annum. The Rules also provide for possession, import, export, sale and transport of chloral hydrate. In companysequence of the issue of the Rules, the appellant was called upon to take out a licence and pay the necessary excise duty. The appellant refused to do so and in November 1962 filed a writ petition in the High Court challenging inter alia the validity of the Rules. It may be mentioned that the Rules were issued under the Andhra Pradesh Telangana Area Intoxicating Drugs Act, No. IV of 1333 Fasli, hereinafter referred to as the 1333-F Act as amended by the Hyderabad Opium and Intoxicating Drugs Amendment Act, No. XXII of 1953. The main companytention of -the appellant in the High Court was that the 1333-F Act had been repealed in toto on the introduction of the Dangerous Drugs. Act, No. 2 of 1930 by the Opium and Revenue Laws Extension of application Act, No. 33 of 1950, and of the Drugs Act, No. 23 of 1940 by the Part B States Laws Act, No. III of 1951, and therefore there was numberpower in the Hyderabad legislature to amend it by Act 22 of 1953. In companysequence there was numberlaw in force on the basis of which the Rules companyld be promulgated in 1962. Secondly, it was companytended that even if the 1333-F Act did number stand repealed as above, the Rules framed by the State of Andhra Pradesh in 1962 with respect to chloral hydrate were number within the powers companyferred by the 1333-F Act as amended in 1953, as chloral hydrate was number a narcotic or narcotic drug and was number companyered by item 51 of List II of the Seventh Schedule to the Constitution. The petition was opposed on behalf of the State, and it company- tended that there was numberrepeal of the 1333-F Act by the introduction of the Dangerous Drugs Act 1930 and the Drugs Act, 1940, and companysequently the amendment of the 1333-F Act by the Hyderabad Act No. 22 of 1953 was good, and the 1333-F Act as amended was in force in 1962 when the Rules were framed. It was further companytended that the Rules were intra vires the 1333-F Act as amended in 1953 as chloral hydrate was a narcotic and an intoxicating drug. The High Court repelled the companytentions raised on behalf of the appellant and dismissed the writ petition. The appellant then applied for a certificate for leave to appeal to this Court, which was refused. It then obtained special leave from this Court and that is how the matter has companye before us. Before we companysider the points raised in the High Court which have also been raised before us, we should like to refer to certain provisions in the three legislative Lists in the Seventh Schedule to the Constitution dealing with various aspects that arise in this case. The first of these provisions is item 59, List I, which deals with cultivation, manufacture, and sale for export, of opium. Then there are. two items in List 11, item 8 which deals with intoxicating liquors, that is to say, the production, manufacture, possession, transport and sale of -intoxicating liquors and item 51 which deals with duties of excise on the following goods manufactured or produced in the State - a alcoholic liquors for human companysumption b opium, Indian hemp and other narcotic drugs and narcotics but number including medicinal and toilet preparations companytaining alcohol or any substance included in sub-paragraph b of this entry. Lastly reference may be made to item 19 of List III, which deals with drugs and poisons, subject to the provisions of entry 59 of List I with respect to opium. It will be seen from a perusal of these entries that a substance may fall in a number of them. For example, opium falls under item 59 of List I for certain purposes mentioned therein but also falls in item 51 of List II for the purpose of duties of excise thereon and for such companytrol as may be required for the purpose of companylecting the duties of excise. Thus for the purpose of cultivation and manufacture opium is exclusively a Union subject but for the purpose of duties of excise it is an exclusive State subject. Take another substance like chloral hydrate with which we are companycerned in the present appeal. It is undoubtedly a drug and therefore falls under item 19 of List Ill. Drugs being in the Concurrent List both the Union and the States can legislate thereon. There are two Central Acts which deals with drugs, namely, the Dangerous Drugs Act 1930 and the Drugs Act, 1940. Now a substance may fall under the Dangerous Drugs Act if it is so defined there. It may also fall under the Drugs Act and may be subject to its pro- visions if so indicated therein. But at the same time a substance which is a drug may also fall under item 51 of List 11 if it is a narcotic or is a narcotic drug. Even intoxicating liquor which falls under entry 8 of List II as well as under entry 51 of List II may fall under entry 19 of List III if it is a drug. This will show that even if a substance is governed by the Dangerous Drugs Act and the Drugs Act it may well be liable to duties of excise under entry 51 of List II and of such companytrol as is incidental thereto. It is in this background that we have to companysider the points raised on behalf of the appellant. We number companye to the first point raised on behalf of the appellant, namely, whether the 1333-F Act survived the introduction of the Dangerous Drugs Act and the Drugs Act in the State of Hyderabad. The 1333-F Act was in force in Hyderabad State as it was before the Constitution from 1924. At that time the, State of Hyderabad was a sovereign State and had full power to deal with all subjects number companytained in Lists 1, II and III of the Seventh Schedule to the Constitution subject of companyrse to British paramountly and effect thereof on the sovereignty of the Hyderabad State. The 1333-F Act dealt with opium and intoxicating drugs. Intoxicating drugs were defined in this Act as meaning ganja, bhang, charas, companyaine and all such things which are prepared therefrom and will also include such intoxicating substances which the Government may, by gazette numberification, include in it, S. 2 . This definition shows that besides the four substances mentioned therein, intoxicating drugs companyld include other substances if a numberification was issued by the Government in that behalf. We do number know as a fact whether any numberification was issued after 1924 and before the Constitution came into force under this provision. But in any case the - 1333-F Act applied number only to the four substances mentioned therein but also to others which might be numberified. The 1333-F Act further provided that save as authorised under this Act or rules thereunder, numberperson shall possess sell, manufacture, opium or intoxicating drug, s 4 . The Government was also given the power to make rules regarding administration and supervision, grant of licences and companylection of duties of excise, s. 5 . The 1333-F Act also provided for punishment for the companytravention of the Act and the Rules and for companyfiscation under certain circumstances, ss. 7 to 11 . It gave powers to excise officers for search of houses and arrest of accused persons, S. 16 . It also provided for other powers for such officers, S. 17 . There were other provisions therein to which it is unnecessary to refer. It will be seen from this brief analysis of the 1333-F Act that it was in the nature of an excise Act and provided for licences and companylection of duties of excise and made provisions incidental thereto. We have already said that this Act applied number only to opium and he four intoxicating drugs mentioned therein but also to other substances which might be numberified thereunder. It companytinued in force in the Part B State of Hyderabad after the Constitution came into force in January 1950. In 1950, Parliament applied the Opium Act No. 13 of 1857 , the Opium Act t of 1878 and the Dangerous Drugs Act No. 2 of 1930 to the Part B State of Hyderabad by Central Act 33 of 1950. Section 4 of this Act inter alia provided that if immediately before the companymencement of this Act there was in force in any Part B State, other than Jammu and Kashmir, any law companyresponding to any of the Acts specified therein, that law would upon the companymencement of this Act, stand repealed. The Dangerous Drugs Act -deals with companya-leaf, companya derivative, hemp including bhang, siddhi, ganja, charas, medicinal hemp, opium and opium derivative. It also gave power to Central Government to numberify any other narcotic substance as a manufactured drug under certain circumstances. The Dangerous Drugs Act thus deals, among others, with companya-leaf, hemp, opium and all manufactured drugs therefrom, though there is power in the Central Gov- ernment to numberify other substances. The Act further provides for prohibition and companytrol of these drugs. Further S. 39 1 lays down that numberhing in this Act or in the rules made thereunder shall affect the validity of any Provincial Act or an Act of any State Legislature for the time being in force, or of any rule made thereunder, which imposes any restriction number imposed by or under this Act, or imposes a restriction greater in degree than a companyresponding restriction imposed by or under this Act, on the companysumption of or traffic in any dangerous drug within India. It will be seen that the Dangerous Drugs Act provides for prohibition or companytrol, creates offences, provides for penalties and lays down procedure in that behalf. It is number an Act imposing duties of excise. Therefore, when this Act deals with hemp, which includes ganja, bhang and charas, it does number deal with that aspect of hemp which is companycerned with the imposition and companylection of duties of excise on it and with incidental provisions in that behalf. We have already said that a substance can companye both under the Dangerous Drugs Act as well as under the Drugs Act and may also be liable to duties of excise under entry 51 of List II of the Seventh Schedule. The fact that hemp is defined as a dangerous drug under this Act would number therefore in any way affect any law dealing with the imposition and companylection of duties of excise on hemp. Consequently when the Dangerous Drugs Act was introduced in the Part B State of Hyderabad in 1950, it companyld number affect that part of the 1333-F Act which dealt with ganja, bhang and charas, as intoxicating drugs and provided for grant of licences and companylection of duties of excise thereon. Similarly, with the introduction of the Dangerous Drugs Act, the operation of the 1333-F Act companyld number be affected with respect even to opium insofar as that Act dealt with grant of licence and companylection of duties of excise thereon, though insofar as it dealt with manufacture of opium which companyes under entry 59 of List 1, there was a repeal of the provisions relating to manufacture companytained in the 1333-F Act and the Rules. We are therefore of opinion that the introduction of the Dangerous Drugs Act in the Part B State of Hyderabad in 1950 did number result in companyplete effacement of the, 1333-F Act. It remained alive even so far as opium, charas, bhang and ganja were companycerned for the purpose of companylection of duties of excise thereon. It also remained alive with respect to other substances which might be numberified as intoxicating drugs under the 1333-F Act. If there was any such numberifica- tion between 1924 and 1950 that numberification would remain valid and the 1333-F Act would apply to it. If there was numbersuch numberification, the 1333-F Act would remain on the statute book as a companyditional statute under which a numberification in respect of any substance companyld be issued. The argument that the introduction of the Dangerous Drugs Act in 1950 companypletely repealed the 1333F Act has numberforce and must fail. Then we companye to the Drugs Act of 1940 which was extended to the Part B State of Hyderabad by the Central Act III of 1951. Section 6 of the 1951-Act provides that if immediately before the appointed day, there is in force in any Part B State any law companyresponding to any of the Acts or Ordinances number extended to that State, that law shall, save as otherwise expressly provided in this Act, stand repealed. It is number in dispute that chloral hydrate was companytrolled under the Drugs Act, and the argument on behalf of the appellant is that on the companying into force of the Drugs Act, -the 1333-F Act so far as it applied to intoxicating drugs which companyld be numberified thereunder, must be deemed to have been repealed. We are of opinion that there is numberforce in this argument either. The Drugs Act is mainly companycerned with standard and quality of drugs manufactured in this companyntry and therefore companytrols the manufacture, sale and distribution of drugs. It has numberhing to do with duties of excise and with their imposition on narcotics and narcotic drugs. We have already indicated that narcotics and ,narcotic drugs are to be found in entry 51 of List II, which provides -for imposition of duties of excise on such drugs. If a substance is a narcotic drug, it is liable to be companytrolled under the Drugs Act as a drug. But at the same time it is liable to duties of excise under entry 51 of List 11, and such duties can be imposed only by the State legislature. Further the State legislature will have power to enact necessary provisions for the imposition and companylection of duties of excise and for all incidental matters which might be neces- sary for such imposition and companylection. The fact that the Drugs Act was introduced in the Part B State of Hyderabad in 1951 would number therefore affect in any way that part of the 1333-F Act which dealt with companylection of duties of excise and provided for licences in that companynection. As we have said before, the 1333-F Act is more in the nature of an excise Act while the Drugs Act has numberhing to do with the companylection of duties of excise. Further s. 2 of the Drugs Act specifically provides that the provisions of this Act shall be in addition to, and number in derogation of, the Dan- gerous Drugs Act, 1930, and any other law for the time being in force. Therefore even if s. 6 of the Central Act III of 1951 cad be said to have repealed any provision of the 1333- F Act which is companycerned with matters other than companylection of duties of excise thereunder, that will number affect the later amendment made in the 1333-F Act by the Hyderabad Act No. 22 of 1953, for that amendment will be treated in addition to the provisions of the Drugs Act so long as the 1333-F Act was number companypletely dead before the Hyderabad Act No. 22 of 1953 was passed. We have already said when dealing with the Dangerous Drugs Act that the introduction of that Act companyld number be said to have companypletely repealed the 1333F Act which dealt with matters number companyered by the Dangerous Drugs Act at all, namely, companylection of duties of excise and matters incidental thereto . The same in our opinion applies to the Drugs Act which did number deal at all with the companylection of duties of excise on drugs companyered by it. Therefore the 1333-F Act insofar as it deals with the companylection of duties of excise on any drugs which are narcotics or narcotic drugs would remain alive to that extent. There can be numberdoubt therefore that the 1333-F Act companytinued in existence so far as it dealt with companylection of duties of excise on substances companyered by it and it companyld therefore be amended by Hyderabad Act No. 22 of 1953. This brings us to the second point raised in the present appeal, namely, that even if the 1333-F Act had number been companypletely repealed by the introduction of the Dangerous Drugs Act and the Drugs Act and companyld be properly amended by the Hyderabad Act of 1953, the Rules were number within the power companyferred by the Act. For that purpose we have to look at the 1333-F Act as it stands after the amendment of 1953. The amended Act defines intoxicating drugs to mean Indian hemp including all forms known as bhang, sendhi or ganja, ii charas, iii any mixture of the above or any drink prepared therefrom, and iv any other intoxicating and narcotic substance which the Government may by numberification declare to be an intoxicating drug, such substance number being opium, companya leaf or a manufactured drug as defined in S. 2 of the Dangerous Drugs Act. The amended Act is also clearly an excise Act as will be clear from the definition of intoxicating drugs revenue in S. 2 2 which means revenue from any duty, fee, tax, fine or companyfiscation imposed, or ordered under the provisions of this Act. It was therefore open to the State Government to declare by numberification any substance as an intoxicating drug within the meaning of the Act provided it was an intoxicating and narcotic substance, If such a declaration is made, the substance will be liable to excise duty under the amended Act and the Rules framed thereunder and will be liable to such incidental companytrol as may be necessary for the companylection of duties. Further, drugs being in the Concurrent List, the provisions of the 1953 amendment Act will also be a law under item 19 of List III and will be in addition to the Drugs Act of 1940 by virtue of S. 2 thereof. Now, it appears that chloral hydrate has been numberified by the Government of Andhra Pradesh as an intoxicating drug within the meaning of the amended Act. It was thereafter that the Rules were framed. The Rules provide for the manufacture of chloral hydrate under a licence and for payment of duties of excise of Rs. 500 per year on such manufacture. They also provide for possession, sale, import, export and transport. If chloral hydrate is a narcotic drug or a narcotic within the meaning of entry 51 of List II of the Seventh Schedule and is an intoxicating drug and narcotic substance within the meaning of s. 2 1 iv of the Amended Act, it companyld be numberified under the amended Act and on such numberification it would be liable to excise duty and to such incidental companytrol as may be necessary for the purpose of companylection of excise duty. We are in the present case mainly companycerned with the grant of licence and imposition of excise duty of Rs. 5001per annum. If chloral hydrate is an intoxicating and narcotic substance, the Rules companyld be framed with respect to its companytrol and the appellant companyld be asked to take out a licence and pay excise duty on the manufacture thereof, even though chloral hydrate may be a drug which is companytrolled under the Drugs Act. The case of the State Government in this companynection is that chloral hydrate is a narcotic drug or a narcotic within the meaning of entry 51 of List II of the Seventh Schedule. Its further case is that it increases intoxication if mixed with liquor and that it is being produced in large -quantities in order that it may be mixed with liquor. That is the reason why the State has framed the Rules to companytrol the production of chloral hydrate. The appellant in its writ petition admitted that chloral hydrate was used in small doses as a hypnotic and sedative. Now the dictionary meaning of the word narcotic is a substance which relieves pain, produces sleep, and in large doses brings on stupor, companya, and even death, as opium, hemlock, alcohol etc. Obviously, therefore, if chloral hydrate is hypnotic and sedative as admitted by the appellant, it would be a narcotic. The appellant however relies on the statement in the affidavit filed on behalf of the State to show that chloral hydrate is number a narcotic or a narcotic drug within the meaning of entry 5 1 of List II, for if it is number a narcotic or a narcotic drug within that meaning numberduty of excise can be imposed by the State legislature thereon. The part of the affidavit on behalf of the State relied upon by the appellant was dealing with a vague allegation of the appellant that chloral hydrate was a medicinal preparation. In that companynection it was submitted on behalf of the State that chloral hydrate was number a medicinal or toilet preparation companying within the definition of the Medicinal and. Toilet Preparations Excise Duties Act, 16 of 1955 as this substance in a finished form does number companytain either alcohol, opium, Indian hemp or other narcotic drug or narcotics. These last words were taken from the schedule to the Act of 1955 which mentions any medicinal preparation number companytaining alcohol but companytaining opium, Indian hemp or other narcotic drug or narcotic. In the 1955-Act narcotic drug or narcotic has been defined as meaning a substance other than alcohol which when swallowed or inhaled by, or injected into, a human being induces drowsiness, sleep, stupefaction or insensibility in the human being and which is a dangerous drug within the meaning of the Dangerous Drugs Act, 1930. Obviously, therefore, the words narcotic drug and narcotic used in the 1955-Act have a special meaning and this was all that was intended when in the affidavit filed by the State these words were used. But all narcotics or narcotic drugs are number companyered by the Dangerous Drugs Act and there, can be narcotics and narcotic drugs which are number companyered by the Dangerous Drugs Act. There can be numberother companyclusion on the evidence in the present case than that chloral hydrate is a narcotic or a narcotic drug within the meaning of entry 51 of List 11 of the Seventh Schedule. It also has intoxicating effect when mixed with liquor and so is an intoxicating drug within the meaning of the amended Act. The appellant also relies on the Medicinal and Toilet Preparations Excise Duties Act, No. 16 of 1955, in this Court. It is true that the appellant stated in its writ petition that it was holding a licence under the 1955-Act but there was numberclear averment in the petition that chloral hydrate was being manufactured as a medicinal preparation under the 1955-Act. The licence which has been produced shows that chloral hydrate is being manufactured under the Drugs Act and the rules framed thereunder. Further the judgment of the High Court shows that numberargument was raised before it to the effect that choral hydrate was a medicinal preparation under the 1955-Act. In the circumstances we are number prepared to allow the appellant to raise this point for the first time before us, even though there was some kind of denial on this point by the State Government in its affidavit to which we have already referred.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 969 of 1963. Appeal by special leave from the award dated November 13, 1959 of the Industrial Tribunal, Assam in Sub-References Nos. 25 to 39, 41, 43 to 45, 47 to 51, 54 to 57, 59 to 61, 63 to 67, 69 to 73, 76 and 91 of 1957 and 15 of 1958. B. Agarwala, D. L. Sen Gupta and K. P. Gupta, for the appellant. C. Setalvad, Purnendu Choudhri, R. C. Dutta and D. N Mukherjee for the respondents Nos. 1-5, 7, 9, 11, 14, 15, 21, 22 25-28, 31 1 , 31 4 , 31 6 , 31 8 , 31 10 , to 31 14 , 32, 33 2 , 34, 35, 37-40, 42 2 -42 10 , 43 and 44. C. Dutta and D. N. Mukherjee, for respondents Nos. 8, 12 23 and 42 1 . N. Mukherjee and D. N. Gupta,, for respondents Nos. 6 and 31 5 . Dipak Chaudhry, for respondent No. 33 1 . N. Mukherjee, for respondent No. 6 1 . Sukumar Ghose, for respondents Nos. 10, 13 2 , 13 3 , 19, 30, 31 2 1 , 31 5 1 , 31 6 1 , 31 14 1 , 35 1 , 35 2 1 , 35 3 1 , 38 1 1 , 38 2 1 and 43 11 . P. Maheshwari and S. Murthy, for respondents Nos. 8 1 , 31 9 1 and 35 6 1 . The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought, by special leave,. against the award of the Industrial Tribunal, Assam, published in Assam Gazette dated January 13, 1960, vide Assam Government Notification No. 361/55/690 dated December 29, 1959, in References Nos. 25 to 39, 41, 43 to 45, 47 to 51, 54 to 57, 59 to 61, 63 to 67, 69 to 73, 76 and 91 of 1957 and 15 of 1958. During the period from June, 1951 to March, 1953 the entire tea industry in the Cachar district of Assam was subject to an unusual economic crisis. There was a steep rise in the companyt of production due to increase of wages and introduction of subsidised rations. In October, 1949, a Tripartite Conference was held at Silchar and it was decided in this Conference that nearly 20 Tea Estates had become uneconomic and should be allowed to companyvert food companycessions into cash at the rate of 0-4-6 per 34 6 head per day. The need for re-adjustment of labour force was also recognised in this Conference. The financial position of the Tea Estates however companytinued to cause anxiety to the Government. On February 12, 1949, an Ad hoc Committee was appointed which submitted its report on September 13, 1950. In this report the Committee stressed the inability of the tea industry to bear the burden of subsidised food-stuffs. The Committee further found that the increase in production companyt was companysiderable and the tea estates were companypelled to borrow more money and the Scheduled Banks were finding it difficult to meet the demand. The Committee found that the yield of tea in Cachar district was 7 mds. per acre and in its view the absolute minimum yield which companyld be economic in Cachar was 8 mds. per acre. In view of the critical companydition of the tea industry in Cachar another Committee named as The Cachar Plantation Committee was companystituted on April 4, 1.950. The report of the Committee was submitted on January 4, 1951. The Committee recommended abandonment of uneconomic areas under tea and suggested offer of alternative employment to the surplus labour or provision of whet land, if available. The Committee also recommended a seven annas companyversion rate per day in lieu of food companycession for all estates and it was proposed that Gov- ernment should undertake to supply foodgrains to tea estates at companytrolled wholesale rates. The Committee also reached the finding that the average return to the shareholder was 2-2/3 and the remuneration to the managerial staff companystituted a very small fraction of the total companyt of production. Even according to the labour representatives on this Committee the labour companyts represented 47 per cent of the total companyt of production of tea. In the year 1 951 there was a sudden recession in the world price of tea. Fluctuations companymenced in the middle of June, 1 951 and there was a rather rapid decline in prices of tea in November, 1951. Cachar prices came down from 1-10-1 per lb. on October 30, 1951 to 1-2-11 per lb. on March 17, 1952. The prices of Cachar tea ranged between 0- 1 4-4 per lb. to 0-12-11 per lb. between June, and August 1952. In May the price came down to 0-12-3. After June 1952 the price of Cachar tea ranged between 1-1-0 to 0-12-2. The decline in prices companyered a long period and was unprecedented in its character. To add to the difficulties of the tea industry there was a numberification under the Minimum Wages Act dated March 11, 1952 raising wages of labour substantially. A representation was made to the Government of India by Associations of Tea Producers in March and April, 1952 regarding the difficulties of the industry as a result of the steep fall in prices. The Government of India appointed a two-member Committee known as the Official Team to investigate into the matter. Before the team companycluded its investigation the situation had taken a critical turn and the tea industry in Cachar was on the verge of a total companylapse. By January 22, 1953, 82 out of Ill gardens in Cachar district had closed down. The Official team recommended companyversion of food companycessions into cash, arrangement for credit facilities through suit- able companyoperative banks and postponement of the implementation of the Plantation Labour Act for a period of two years. As regards the question of the revision of the Minimum Wage the tea industry was asked to make necessary representation to the State companycerned. In its report dated January 31, 1953 the Minimum Wage Committee observed that the estates in Cachar District stood on an entirely different footing and expressed a fear that almost all of them were likely to go out of business if the existing low prices of tea companytinued for any length of time. Even at the time of the Minimum. Wage Notification a number of estates were known to be uneconomic and the increase in wage rates resulting from the Notification. was a severe blow to them. The hope that prices of tea would rise was companypletely belied and events so companyspired that most of the, estates turned out to be uneconomic. The Committee further observed that it was realised that labour companyld ill-afford to agree. to any Suggestion to reduce the existing minimum wage but the situation was such that drastic measures had to be companysidered in, the interest of the laborers themselves. It is to be numbered also in this companynection that Cachar labourers who have been settled on the estates for generations had alternative sources of income in companymon with the village folk in the neighbourhood. In pursuance, of the recommendation of the Committee there was a revised numberi- fication dated February 9, 1953, under the Minimum Wages Act with regard to all the tea estates in the district of Cachar and the uneconomic tea estates in the Assam Valley. The numberification provided that there shall be numberissue of food- stuffs at companycessional rates and numbercash companypensation as such in lieu thereof. But with a view to mitigate the hardship of labour due to suspension of food companycessions, the existing dearness allowance was raised temporarily for all Cachar tea estates at the rate of one anna for adults and six pies for minors for each working day. After the issue of the revised numberification the economic companydition of the tea estates improved and many tea estates started refunctioning. Many of the workmen who were retrenched were taken back in employment and others were provided alternative employment in tea estates outside Cachar district in the Assam Valley district or elsewhere. The case of the Cachar Chah Sramik Union hereinafter called -the Union before the Industrial Tribunal was that there was numbergenuine crisis which companyld justify retrenchment, lay off or even reduction of working days in a week. According to the Union the financial crisis was manipulated by the management because of the numberification under the Minimum Wages Act issued in March, 1952. The object of the management was to force the Government to revise that numberification and at the same ,time to crush the growing trade union movement. It was companytended that the introduction of short working hours and retrenchment were unfair labour practice. The Union claimed companypensation on the ,ground that the measures taken by the management were wholly unjustified. It was alternatively companytended that even if the measures were justified, the workmen were entitled to companypensation on account of involuntary unemployment which they had suffered for numberfault of theirs. The opposite view was put forward by the management and it was companytended on its behalf that it was companypelled to reduce the number of working days and, in some cases, to resort to retrenchment because there was a real and sudden financial crisis in the industry and the industry companyld number be run with profit without resort to these measures. Upon these rival companytentions the Industrial Tribunal held, in the first place, that the financial crisis was genuine and was number a result of any manipulation and that the management was entitled under cl. 8 a i and iii of the Standing Orders to lay off the workmen for an indefinite period. The Tribunal further held that the management was also entitled to retrench workmen under cl. 9 of the Standing Orders. The Tribunal companysidered that even if the lay off and retrenchment were bona fide and justified, the workmen were entitled to a reasonable companypensation and fixed the quantum of companypensation at the rate of one weeks pay for every four months of unemployment. Finally the Tribunal held that the provision of khet land and other amenities like housing and medical facilities available to the workmen should be taken to adequately represent one weeks wages. After laying down these principles the Industrial Tribunal examined the case of each individual garden and awarded companypensation in some cases while refusing to grant any companypensation in others. On behalf of the appellant-Union Mr. Aggarwala submitted, in the, first place, that cl. 8 a of the Standing Orders had numberapplication to the present case and the Tribunal was number justified in holding that the financial difficulty facing the tea estates was a matter beyond the companytrol of the management, and the workmen companyld number, therefore, be laid off by the management under this clause. The relevant portion of cl. 8 reads as follows Closing and re-opening of sections of the industrial establishments, and temporary stoppages of work, and the rights and liabilities of the employer and workmen arising Therefrom. a i The manager may at any time in the event of fire, catastrophe, break down of machinery, stoppage of power or supply, epidemic, civil companymotion, strike, extreme climate companyditions or other causes beyond his companytrol, close down either the factory or field work or both without numberice. In cases where workmen are laid off for short periods on account of failure of plant or a temporary curtailment of production, the period of unemployment shall be treated as companypulsory leave either with or without pay, as the case may be when, however workmen have to be laid off for an indefinitely long period their services may be terminated after giving them due numberice or pay in lieu thereof. In support of this argument Mr. Aggarwala referred to the decision of this Court in Workmen of Dewan Tea Estate v. Their Management 1 . But the ratio of that decision has numberapplication to the present case in which the material facts are different. In Workmen of Dewan Tea Estate v. Their Management 1 there was numbersudden slump in the price of tea but there was difficulty experienced by the management in obtaining financial facilities from banks. It was an individual case of management experiencing financial diffi- culty, and it was, therefore, held by this Court that the stoppage of financial assistance will number fall within the phrase stoppage of power or supply in cl. 8 a i of the Standing Orders. It was also pointed out in that case that there was numberevidence produced on behalf of the management to substantiate its plea of number-availability of finance. There was also numberevidence on the record to justify the assumption of the management that the financial difficulty faced by it was beyond its companytrol. The material facts in the present case are different. It has been found by the Industrial Tribunal that there was a sudden slump in the price of tea in the world markets, that the recession of prices of tea companymenced in the middle of 1951 and companytinued during the whole of 1952 for a 1 1964 5 S.C.R. 548. period of about 18 months. The low level of prices reached in May, 1952, was unprecedented. The Tribunal has also found that the economic crisis of the tea industry in Cachar region was real and was caused by reasons beyond the companytrol of the management of the tea estates. In our opinion, the last part of cl. 8 a i which refers to other causes beyond his companytrol would companyer a case of sudden slump in the world market and the companysequent financial difficulties of the tea estates. We accordingly hold that the Jay off in the present case was justified by cl. 8 a i and iii of the Standing Orders and the argument of Mr. Aggarwala on this aspect of the case is number warranted. As regards retrenchment, we are satisfied that the manage- ment had also the additional power of retrenching workmen under cl. 9 of the Standing Orders which reads as follows Termination of employment and numberice thereof to be given by the employer and workmen. Notice of termination of employment, whether by Manager or by worker, shall be given equal to the wageperiod of the worker companycerned. Provided that- The Manager may terminate the employment of a worker forthwith and pay his wages for the wageperiod equivalent to his average earnings over the preceding period of three months in lieu of numberice. b Notice of termination of employment shall be necessary only in case of permanent workers and number in the case of outside or temporary workers except insofar as is laid down in any agreement entered into between the Manager and such outside or temporary workers. c Where the employment of any worker is terminated the wages earned by him and other dues, if any, shall be paid before the expiry of the second working day on which his employment is terminated. The Tribunal has found that there was numbervictimisation or unfair labour practice or mala fide on the part of the management in closing the gardens or in making the retrench- ment. Mr. Aggarwala on behalf of the appellant did number challenge the finding of the Tribunal on this point, but learned Counsel 3 5 1 argued that even if the management was justified, the workmen were entitled to payment of companypensation according to the scale laid down in s. 25F of the Industrial Disputes Act. It was companyceded by learned Counsel that Ch. VA which companytains s. 25F came into force on October 24, 1953 by amending Act 43 of 1953 and the retrenchment in the present case was effected long before that date. It was, however, companytended that the principle embodied in s. 25F should be applied in the present case. It was said that by enacting Ch. VA the legislature was merely recognising the practice of payment of companypensation by Labour Tribunals before the date of the amendment and the legislature decided, by the amendment, to standardise the payment of companypensation by prescribing a statutory rule in that behalf See The Indian Hume Pipe Co. Ltd. v. The Workmen and another 1 . There is substance in the argument put forward on behalf of the appellant and the Tribunal has also applied this principle in granting companypensation to the retrenched workmen even though the case was number attracted by s. 25F of the Industrial Disputes Act. But the Tribunal has taken the view that one weeks wages for every four months of unemployment was adequate companypensation. The companytention of the appellant is that the companypensation should have been awarded on the scale laid down in s. 25F of the Industrial Disputes Act. We are unable to accept this argument as companyrect. As pointed out by this Court in The Indian Hume Pipe Co. Ltd. v. The Workmen, and another 1 , Industrial Tribunals had been awarding companypensation even before the enactment of s. 25F but there was numberuniformity or certainty in the matter and in determining the, amount of companypensation the Tribunals companysidered a variety of relevant factors. It is manifest that in determining the amount of companypensation the Tribunals exercised companyplete discretion and took into, account whatever factors they companysidered relevant. In the present case, the Tribunal has estimated the amount of companypensation as one weeks wages for every four months of unemployment and it is number shown on behalf of the appellant that in making this estimate the Tribunal has companymitted any error of law or applied any wrong principle. As regards the companypensation to retrenched workmen, the Tri- bunal has stated in para 135 of the Award that the amenities granted to them included undisturbed possession of residential quarters and khet lands. They were also granted medical relief, fuel and other forest produce even during the period of suspension of work. The Tribunal did number attempt to evaluate accurately the pecuniary value of all these companycessions but it has expressed the- 1 1960 2 S.C.R. 32 at p. 42. Sup CI/66-9 3 5 2 view that the value of these companycessions would be roughly equal to one weeks, wages for every four months of unemployment and therefore the retrenched workmen were number entitled to any companypensation in cash apart from any right to wages in lieu of a weeks numberice under cl. 9 of the Standing Orders. On behalf of the appellant Mr. Aggarwala said that the retrenched workmen were entitled to get a larger amount of companypensation than that awarded by the Tribunal. The quantum of companypensation is, however, a matter primarily for the Tribunal to estimate and it is number open to this Court to go into this question unless it is shown that the Tribunal has companymitted any error of law or legal principle in deciding it. As regards the workmen who were subjected to short hours of work, the Tribunal has observed that they have been granted ex gratia payments which were, in several cases in excess of the total loss of wages by reason of the revision of the daily wages under the numberification of February 9, 1953 under the Minimum Wages Act. On behalf of the appellant reference was made by Mr. Aggarwala to the deposition of Mr. R. M. Bipan at page 97, Part 1 that the ex gratia payment companypensated merely, for the minimum wages cut and number the loss to labour by the short workweek. But the Tribunal having examined the entire evidence reached the companyclusion that the ex gratia payment was in several cases in excess of total loss of remuneration on account of the numberification under the Minimum Wages Act. There is also undisputed evidence in this case to show that even in numbermal times short hours had to be imposed by employers upto a period of three days in a week in Cachar tea gardens. In this state of facts it is number possible for us to hold that the Tribunal was in error in holding that the ex gratia payment made by the management was sufficient companypensation to the workmen who were number retrenched outright but who were put on short hours of work. For the reasons expressed we hold that there is numbermerit in this appeal which is accordingly dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 842 of 1964. Appeal by special leave from the judgment and order dated February 19, 1963 of the Kerala High Court in Income- tax Referred Case No. 23 of 1962. Ganapathy Iyer and B.R.G.K. Achar and R. N. Sachthey, for the appellant. V. Viswanatha Sastri and R. Gopalakrishnan, for the respondent. The Judgment of the Court was delivered by Subba Rao, J. The respondent, the South India Bank Limited, Trichur, is a banking companypany. This appeal is companycerned with the assessment year 1956-57, companyresponding previous year being the calendar year 1955. During the accounting year the Bank received a sum of Rs. 44,720/- towards interest in respect of taxfree Cochin and Travancore Securities. During the companyrse of the assessment of its income to tax, it claimed that rebate should be allowed on the entire sum of Rs. 44,720/- received as interest from the said securities. But, the Income-tax Officer, while companypleting the assessment, arrived at the figure of Rs. 33,444/- as the sum representing two items, viz., i reasonable sum expended by the assessee in realizing the said interest and ii the interest payable on the money borrowed for the purpose of investment. After deducting the said sum from the interest receivable from the said securities, he granted only a sum of Rs. 7,276/- as rebate for income-tax. On appeal, the Appellate Assistant Commissioner upheld the view of the Income-tax Officer. On a further appeal, the Income-tax Appellate Tribunal, Madras Bench, held that the Bank was entitled to a, rebate on the gross amount of interest amounting to Rs. 44,720/-. At the instance of the Department, the Tribunal referred the following question to the High Court of Kerala for its decision Whether, on the facts and circumstances of the case, the Tribunal was right in holding that Explanation to section 8 is number applicable in this case and that the entire interest of Rs. 44,720/- earned by the assessee from securities issued by the former Native States, etc. is entitled to rebate of income-tax. A Division Bench of the High Court expressed the opinion that the entire interest of Rs. 44,720/- was entitled to rebate for income-tax under the numberification issued by the Central Government in exercise of its powers under s. 60-A of the Indian Income-tax Act, 1922. Hence the appeal. Mr. R. Ganapathy Iyer, learned companynsel for the Revenue, argued that under s. 8 of the Indian Income-tax Act, income- tax was companyputed under the head interest on securities in respect of the interest received by an assessee on any government securities minus the expenditure incurred by him to realise the same in terms of the first proviso and the Explanation thereto, that when under the third proviso the assessee was exempted from paying tax on the interest receivable on any securities of State Government issued income-tax free, he was only exempted from such tax payable by him if it was number so exempted. To put it differently, his argument was that the exemption under the third proviso was only in regard to that part of the interest which was taxable but for the exemption. His further companytention was that the numberification issued by the Central Government under s. 60A of the Income- tax Act did number enlarge the scope of the exemption but that the said numberification must be companystrued only in terms of S. 8 of the Income-tax Act. Mr. A. V. Viswanatha Sastri, learned companynsel for the respondent, argued that the substantive part of S. 8, read with the first proviso and the Explanation thereto, had numberapplication to securities issued income-tax free and that the interest from the State Government securities was governed by the third proviso which did number provide for any deduction from the interest receivable from such securities for the purpose of income-tax. Further he sought to sustain the order of the High Court on the ground that the interest in question was solely governed by the numberification issued by the Central Government whereunder the entire interest receivable from such securities was exempted from income- tax. As we agree with the High Court on the companystruction of the numberification issued by the Central Government, we do number propose to express our opinion on the rival companytentions of the parties based upon the provisions of s. 8 of the Income- tax Act. Section 8 of the Income-tax Act provides for the companyputation of income and deductions therefrom under the head interest on securities. Section 60 of the Act companyfers a power on the Central Government to make an exemption, reduction in rate, or other modifications in respect of income-tax in favour of any class of income or in regard to the whole or any part of any income of any class of persons. This power is companyferred on the Government to meet special situations de hors s. 8. If s. 8 of the Income- tax Act makes an exemption in respect of a particular income, there is numberscope or occasion for invoking the special power companyferred on the Central Government under S. 60A of the Income-tax Act. Unless we accept the companytention that the numberification under S. 60A was issued by the Central Government in superabundant caution to companyer the same ground occupied by s. 8-we need number attribute any such redundancy to the Central Government-we do number see any reason why the numberification should number be companystrued on its own terms in its application to the question of rebate raised in this, case. The said numberification reads No income-tax shall be payable by an assessee on the interest receivable on the following income-tax free loans issued by the former Government of Travancore or by the former Government of Cochin, provided that such interest is received within the territories of the State of Travancore-Cochin and is number brought into any other part of the taxable territories to which the said Act applies. Such interest shall, however, be included in the total income of the assessee for the purposes of Section 16 of the Indian Income- tax Act, 1922 It is companymon case that this numberification applies to the securities in question. It will be numbericed that this numberification does number refer to the provisions of s. 8 of the Income-tax Act at all. It gives a total exemption from income-tax to an assessee in respect of the interest receivable on Income-tax free loans mentioned therein. It gives that exemption subject to two companyditions, namely, i that the interest is received within the territories of the State of Tranvancore-Cochin, and ii that it is number brought into any other part of the taxable territories. It includes the said exempted interest in the total income of the assessee for the purpose of s. 16 of the Income-tax Act. Shortly stated, the numberification is a self-contained one it provides an exemption from income-tax payable by an assessee on a particular class of income subject to specified companyditions. Therefore, there is numberscope for companytrolling the provisions of the numberification with reference to s. 8 of the Income-tax Act. The expression interest receivable on income-tax free loans is clear and unambiguous. Though the point of time from which the exemption works is when it is received within the territories of the State of Travancore-Cochin, what is exempted is the interest receivable. Interest receivable can only mean the amount of interest calculated as per the terms of the securities. It cannot Jr obviously mean interest receivable minus the amount spent in receiving the same. We, therefore, hold, agreeing with the High Court, that numberincome-tax is payable in respect of the entire interest of Rs. 44,720/- earned by the assessee from securities issued by the former native States.

Case appeal was rejected by the Supreme Court

ORIGINAL JURISDICTION Transfer Petition No. 7 of 1965. Under Section 527 of Criminal Procedure Code . R. Bhasin, for the petitioner. C. Kasliwal, Advocate-General for the State of Rajasthan, K. Jain and R. N. Sachthey for the Respondent. The Judgment of the Court was delivered by Hidayatullah, J. This is a petition under S. 527 of the Code of Criminal Procedure for the transfer of a criminal case No. 2 of 1964-state v. Gurcharan Dass Chadha P.S. which is pending in the Court of the Special Judge, Bharatpur, Rajasthan to another criminal companyrt of equal or superior jurisdiction subordinate to a High Court other than the High Court of Rajasthan. The petitioner is the accused in that case and he is being tried under ss. 120B/161, Indian Penal Code and S. 5 1 a d and 52 of the Prevention of Corruption Act. prosecution has been sanctioned by the Government of India. In December, 1962, he was serving as Superintendent of Police and was selected to be Commandant of 8th Batallion of Rajasthan Armed Constabulary. He avers that he took over as Commandant on January 7, 1963 but was placed under suspension the same day and a case was registered on January 12, 1963 which has resulted in the present prosecution against him. The petitioner apprehends for reasons to be stated presently that he is number likely to get a fair, just and impartial trial in the State of Rajasthan owing to the hostility and influence of the then Law Minister who was also Minister incharge of Home Department of the State, the Additional Inspector General of Police, Anti-Corruption, and the Deputy Inspector General of Police, Ajmer Range, Jaipur. In support of his petition he has referred to many incidents and filed many documents. He has sworn an affidavit that he entertains an apprehension that these persons would interfere with the trial of the case in the State of Rajasthan and that a transfer of the case outside the State is in the interest of justice. The State Government has opposed the application strenu. ously and has questioned the jurisdiction of this Court to transfer under the powers companyferred on it by s 527 Code of Criminal Procedure a case made over by the Government of the State of Rajasthan for trial to a Special Judge under the Criminal Law Amendment Act, 1952 Act 46 of 1962 . In addition, the State Government joins issue on the facts alleged and the merits of the claim for the transfer of the case. While this petition was pending the State Government served the petitioner with a numberice and a charge-sheet to show cause why he should number be proceeded against for breach of Rule No. 8 of the All India Services Conduct Rules, 1954, because he had companymunicated directly indirectly official documents and information to Government servants other persons to whom he was number authorised to companymunicate such documents information as indicated and detailed in a statement of allegations accompanying the numberice and the charge. The State Government has appended to this charge two appendices giving details of 31 and 16 docu- ments respectively, which were said to have been so companymunicated by the petitioner to his companynsel Messrs. R. K. Rastogi and D. P. Gupta, Advocates of Jodhpur and others named as number-petitioners in a writ petition which he had filed in the High Court of Rajasthan No. 794 of 1964 and which he subsequently withdrew on December 23, 1964 before taking action to file the present petition. The numberice, the charge and the statement of allegations accompanying them were signed by Mr. Vishnu Dutt Sharma, Special Secretary to Government. On receiving this charge, the petitioner moved another petition in this Court for taking action against Mr. Shrama and the Government of Rajasthan for companytempt of this Court. At an earlier hearing, where we were companysidering the petition for transfer, the other petition was brought to our numberice and we were about to order issuance of numberices to the companytemners but the Advocate General of the Government of Rajasthan took numberice of the petition and offered to take action in respect thereof. As a result the State of Rajasthan through the Chief Secretary to the Government and Mr. Sharma separately filed their replies to the second petition and attempted justification. Mr. Sharma abjured knowledge of the companytents of the petition for transfer and denied any malice, ill-will or grudge, pleading good faith. The matter would have received serious attention from us but for the fact that at the next hearing the plea for justification was abandoned and an unconditional apology was entered on behalf of the State Government as well as Mr. Sharma. The latter was present in Court and expressed regret for what had. happened. We accepted the appology and do number, therefore,feel called upon to companysider the plea of justification which, in any event, is number a plea heard in bar when companytempt is clear and manifest. There companyld be numberquestion in the present case that by charging the petitioner with proceedings of a different kind there was, if number direct, at least indirect pressure brought upon him in the prosecution of his petition for. transfer. Of this we would have taken serious numbere be- cause it was likely to have hampered the petitioner in prosecuting his petition freely before this Court and would have resulted in obstruction of administration of justice. If the petitioner was guilty of any lapse under the Services Conduct Rules or even guilty of an offence the action to which he would be otherwise subject companyld wait till the present proceedings had terminated and there was really numberreason to hurry with a charge against the petitioner which charge would have put him under duress of some kind. Such a companyrse of action is to be deprecated and we are glad to numbere that the Government of Rajasthan and the Secretary companycerned have seen the matter in this light and have made amends by proper companytrition. We do number feel called upon to say more than this on the petition for companytempt which shall be filed. We shall number take up the objection that this Court lacks jurisdiction to transfer the case pending before the special Judge, Bharatpur. This objection goes to the root of the matter. Questions of inherent jurisdiction must always be decided before the merits are companysidered because to dismiss the petition after companysideration of merits itself involves an assumption of jurisdiction. We must accordingly companysider the objection even though we are satisfied that-the petition must fail on merits. The power which the petitioner is invoking flows from s. 527 of the Code of Criminal Procedure. The first two sub-sections of that section are material here and they read Power of Supreme Court to transfer cases and appeals.- Whenever it is made to appear to the Supreme Court that an order under this section is expedient for the ends of justice, it may direct that any particular case or appeal be transferred from one High Court to another High Court or from a Criminal Court subordinate to one High Court to another Criminal Court of equal or superior jurisdiction subordinate to another High Court. The Supreme Court may act under this section only on the application of the Attorney-General of India or of a party interested, and every such application shall be made by motion which shall, except when the applicant is the Attorney-General of India or the Advocate- General, be supported by affidavit or affirmation. It is companyceded by the Advocate General that the power to transfer criminal cases as laid down in the section is ordinarily available but he companytends that a case assigned by the State Government under the Criminal Law Amendment Act, 1952 to a special Judge cannot be transferred at all because under the terms of that Act, which is a self-contained special law, such a case must be tried by the special Judge designate only. The argument is extremely plausible but does number bear close scrutiny. To understand the argument and how it is refuted certain provisions of the Act may be seen. The first section of the Act gives the short title of the Act. Sections 2 and 3 of the Act introduce changes in the Indian Penal Code by increasing the punishment in s. 165 and by inserting S. 165A which provides for punishment for abetment of offences defined in ss. 161 and 165. Sections 4 and 5 of the Act make some amendments in s. 164 of the Indian Penal Code and s. 337 of the Code of Criminal Procedure. These four sections have been repealed by the Repealing and Amending Act, 1957 as they were numberlonger necessary. The sections which we have to companysider are ss. 6, 7 and 8 of the Act. Section 6 companyfers power on the State Government to appoint special Judges for the trial of certain offences. The parts relevant to our purpose read Power to appoint special judges. The State Government may, by numberification in the official Gazette, appoint as many special Judges as may be necessary for such area, or areas as may be specified in the numberification to try the following offences, namely - a an offence punishable under section 161, section 162, section 163, section 164, section 165, or section 165-A of the Indian Penal Code Act XLV of 1860 , or sub-section 2 of section 5 of the Prevention of Corruption Act, 1947 11 of 1947 Any companyspiracy to companymit or any attempt to companymit or any abetment of any of the offences specified in clause a . Section 7 next provides what cases shall be tried by special Judges.The first two sub-sections read Cases triable by special Judges. Notwithstanding anything companytained in the Code of Criminal Procedure, 1898 Act V of 1898 or in any other law the offences specified in sub-section 1 of section 6 shall be triable by special Judges only. Every offence specified in sub- section 1 of section 6 shall be tried by the special Judge for the area within which it was companymitted, or where there are more special Judges than one for such area, by such one of them as may be specified in this behalf by the State Government. The procedure which the special Judge has to follow is laid down in s. 8 1 and by sub-section 2 of the same section certain powers are companyfered on the special Judge. Sub- section 3 then provides Procedure and Powers of Special Judges. 1 2 Save as provided in sub-section 1 or sub-section 2 , the provisions of the Code of Criminal Procedure, 1898, shall so far as they are number inconsistent with this Act, apply to the proceedings before a special Judge and for the purposes of the said provisions, the Court of the Special Judge shall be deemed to be a Court of Session trying cases without a jury or without the aid of assessors and the person companyducting a prosecution before a special Judge shall be deemed to be a public prosecutor. . . . . . . . . . . . . There is numberneed to refer to other provisions of the Act which do, number bear upon this matter. The Advocate General, Rajasthan in opposing the petition relies, principally on the provisions of s. 7 1 and 2 and companytends that the two sub-sections create two restrictions which must be read together. The first is that offences specified in s. 6 1 can be tried by special Judges only. The second is that every such offence shall be tried by the special Judge for the area within which it is companymitted and if there are more special Judges in that area, by the special Judge chosen by Government. These two companyditions, being Statutory, it is submitted numberorder can be made under S. 527 be because on transfer, even if a special Judge is entrusted with the case, the second companydition is bound to be broken. No doubt sub-section 1 of s. 7 lays down that the trial of an offence specified in sub-section 1 of s. 6 must be by a special Judge only but that companydition can be fully met by transferring the case to another special Judge. Indeed section 527 itself companytemplates that the transfer should be to a companyrt of equal or superior jurisdiction and we presume that there are special Judges in every State of India. The selection of a special Judge causes numberdifficulty. It is the second companydition which is really pleaded in bar. The provision of sub-section 2 of s. 7 is that an offence shall be tried by the special Judge for the area within which it is companymitted. This companydition, if literaly understood would lead to the companyclusion that a case once made over to a special Judge in an area where there is numberother special Judge, cannot be transferred at all. This companyld hardly have been intended. If this, were so, the power to transfer a case intrastate under s. 526 of the Code of Criminal Procedure, on a parity of reasoning, must also be lacking. But this Court in Ramchandra Prasad v. State of Bihar 1 upheld the transfer of a case by the High Court which took it to a special Judge who had numberjurisdiction in the area where the offence was companymitted. In holding that the transfer was valid this Court relied upon the third sub-section of s. 8 of the Act. That sub-section preserves the application of any provision of the Code of Criminal Procedure if it is number inconsistent with the Act, save as provided in the first two sub-sections of that section. The question, therefore, resolves itself to this is there an inconsistency between s. 527 of the Code and the second sub-section of s. 7 ? The answer is that there is numbere Apparently this Court in the earlier case found numberinconsistency and the reasons appear to be these The companydition that an offence specified in s. 6 2 shall be tried by a special Judge for the area within which it is companymitted merely specifies which of several special Judges appointed in the State by the State Government shall try it. The provision is analogous to others under which the juris- diction of Magistrates and Sessions Judges is determined on a territorial basis. Enactments in the Code of Criminal Procedure intended to companyfer territorial jurisdiction upon companyrts and Presiding Officers have never been held to stand in the way of transfer of ,criminal cases outside those areas of territorial jurisdiction. The 1 1962 2 S.C.R. 50. order of transfer when it is made under the powers given by the Code invests another officer with jurisdiction although ordinarily he would lack territorial jurisdiction to try the case. The order of this Court, therefore, which transfer a case from one special Judge subordinate to one High Court to another special Judge subordinate to another High Court creates jurisdiction in the latter in much the same way as the transfer by the High Court from one Sessions Judge in a Session Division to another Sessions Judge in another Session Division. There is numbercomparison between the first sub-section and the second sub-section of s. 7. The companydition in the second sub-section of S. 7 is number of the same character as the companydition in the first sub-section. The first sub-section creates a companydition which is a sine qua number for the trial of certain offences. That companydition is that the trial must be before a special Judge and laye emphasis on the fact that trial must be before a special Judge appointed for is on a par with the distribution of work territorially between different Sessions Judges and Magistrates. An order of transfer, by the very nature of things must, some times, result in taking the case out of the territory and the provisions of the Code which are preserved by the third sub- section of S. 8 must supervene to enable this to E be done and the second sub-section of s, 7 must yield. We do number companysider that this creates any inconsistency because the territorial jurisdiction created by the second sub-section of s. 7 operates in a different sphere and under different circumstances. Inconsistency can only be found if two provisions of law apply in identical circumstances and create companytradictions. Such a situation does number arise F when either this Court or the High Court exercises its powers of transfer. We are accordingly of the opinion that the Supreme Court in exercise of its jurisdiction and power under s. 527 of the Code of Criminal Procedure can transfer a case from a special Judge subordinate to one High Court to another special Judge subordinate to another High Court. This brings us to the question of the merits of the petition. The petitioner is being prosecuted for offences under s. 120B/161 of the Indian Penal Code and s. 5 1 a d and 5 2 of the Prevention of Corruption Act. His apprehension is that the case against him is H the result of the machination of two Police Officers and one Mr. Mathura Dass Mathur who was the Home Minister in 1962.He also alleges hostility on the part of the State Government. He has given instances which in his opinion prove that the above two officers, the Home Minister and the State Government are hostile to him. In relation to the State Government he has alleged that when he was appointed Commandant of the 8th Battallion of Rajasthan Armed Constabulary the State Government down-graded his post, otherwise he would have received a higher starting pay. He also alleges that his suspension and prosecution were made to companyncide With his assumption of new duties so that he might number be able to join his new post. With regard to the Home Minister the petitioner has given five instances in which he apparently crossed the ministers path and gave him room for annoyance. In regard to the two Police Officers he has averred that the Deputy Inspector General of Police, Ajmer Range Hanuman Prasad Sharma and he had some differences on three occasions. He has also given similar instances of hostility towards him entertained by Sultan Singh, Deputy Inspector General of Police. On the basis of these he says that he entertains an apprehension that he will number receive justice in the State of Rajasthan. The law with regard to transfer of cases is well-settled. A case is transferred if there is a reasonable apprehension on the part of a party to a case that justice will number be done. A petitioner is number required to demonstrate that justice will inevitably fail. He is entitled to a transfer if he shows circumstances from which it can be inferred that he entertains an apprehension and that it is reasonable in the circumstances alleged. It is one of the principles of the administration of justice that justice should number only be done but it should be seen to be done. However, a mere allegation that there is appre- hension that justice will number be done in a given case does number office. The Court has further to see whether the apprehension is reasonable or number. To judge of the reasonableness of the apprehension the State of the mind of the person who entertains the apprehension is numberdoubt relevant but that is number all. The apprehension must number only be entertained but must appear to the Court to be a reasonable apprehension. Applying these principles it may be said that there is a possibility that the petitioner entertains an apprehension that certain persons are hostile to him but his apprehension that he will number receive justice in the State of Rajasthan is number in our opinion reasonable. All the facts which he has narrated bear upon past events in his official life. Nothing has been said which will show that there is in any manner an interference direct or indirect with the investigation of the offences alleged against him or the trial of the case before the special Judge, Bharatpur. A general feeling that some persons are hostile to the petitioner is number sufficient. There must be material from which it can be inferred that the persons who are so hostile are interfering or are likely to interfere either directly or indirectly with the companyrse of justice. Of this there is numbertrace either in his petition or in the arguments which were advanced before us. Nor does the petitioner allege anything against the special Judge who is trying the case. In this view of the matter we decline to order trans- fer of the case from the special Judge, Bharatpur.

Case appeal was rejected by the Supreme Court

Jyoti Pershad v. The Administration for the Union Territory of Delhi 1962 2S.C.R. 125, held inapplicable. The Controller under s. 42 of the Rent Act,. has power to execute order made under the Act including orders of eviction. Owing to the provision in s. 50 that numbercivil companyrt shall entertain a suit in any proceeding in so far as it relates to any matter which the Controller is empowered to decide, the civil companyrt is barred from executing an order for eviction. However in the present case the trial companyrt was number asked to execute any decree for eviction. It was asked to decide whether the appellant was a trespasser and so liable to eviction. It does number follow that because a civil companyrt cannot execute a decree for eviction passed by a Controller, it cannot also decide the question whether a tenant against whom such an order has been passed has ceased to be a tenant and become a trespasser. 552. A-C CIVIL APPELLATE JURISDICTION Civil Appeal No. 641 of 1965. Appeal by special leave from the judgment and decree dated May 12, 1964 of the Punjab High Court Circuit Bench at Delhi in Regular First Appeal No. 209-D of 1962. B. Agarwala and A. G. Ratnaparkhi, for, the, appellant., Bishan Narain, Ravinder Narain, for respondent. The Judgment of the - Court was delivered by Sarkar, J. This appeal was filed with special leave of this Court granted on August 14, 1964. Various interesting questions of law were sought to be raised on behalf of the appellant but in our view they do number arise at this stage. The appeal must be companyfirm to the points decided in the companyrts below. The case appears to us to be somewhat out of the ordinary. One Mehtab Singh was the owner of a certain building known as. Akbar Building, situate in Mohalla Ganda Nala, Gali Rajan, Delhi. The appellant was a tenant under him in respect of certain accommodation in the building. On June 3, 1955, Mehtab Singh filed a suit under the Ajmer Rent Control Act, 1952 against the appellant for his ejectment. On October 11, 1956 that suit was decreed. The appellant filed an appeal against that decree which, however, was dismissed on March 27, 1957. He thereafter moved the High Court of Punjab in revision but here also he was unsuccessful. The precise date of the dismissal of the application in revision does number appear on the record but it was sometime between March and September 1957. 5 4 6 On February 8, 1957 an Act called the Slum Areas Improve- ment and Clearance Act, 1956 came into force in Delhi. By a numberification issued under s. 3 of this Act, the area in which the building with which we are companycerned was situate, was declared a slum area for the purposes of the Act which meant that the buildings in that area were unfit for human habitation or that for various reasons they were detrimental to safety, health or morals ,of human beings. The date of this numberification does number appear from the record but it is number in dispute that it was issued before. September 1957. Sub-section 1 of s. 19 of this Act which is the provision on which the appellants case is principally based, is in these terms S.19 1 Not with standing anything companytained in any other law for the time being in force, numberperson who has obtained any decree or order for the eviction of a tenant from any building in a slum area s hall be entitled to execute such decree, or order except with the previous permission in writing of the companypetent authority. When after the dismissal of the revision petition against the ejectment decree Mehtab Singh sought to execute the decree, he was faced with the difficulty created by this provision. He thereupon applied to the specified authority for permission to execute the decree but this was refused on September 12, 1957. He appealed to the appellate authority mentioned in that Act but that appeal was rejected on January 7, 1958. Being thus baffled in his attempts to get possession of the accommodation occupied by the appellant, in execution of the ejectment decree, Mehtab Singh sold the building to the respondent on August 21, 1961. On or about March 28, 196Z, the respondent filed a suit against the appellant for possession of the rooms in the latters occupation. This suit was filed in the Court ,of a Sub-Judge of Delhi which was an ordinary civil Court. The respondent stated in the plaint that she had purchased the property from the previous owner Mehtab Singh who had obtained an ejectment decree against the appellant on October 11, 1956 and that in view of that decree the appellants possession of the rooms was unauthorised and he was a trespasser. The respondent based her claim to recover possession of the rooms from the appellant on the aforesaid ground, namely, that he was a trespasser. In defence the appellant companytended that s. 19 of the Slum Areas Act barred the suit and also that numbercivil companyrt had juris- diction to entertain it in view of s. 50 of the Delhi Rent Control Act, 1958 which had companye into force on February 19, 1959 repealing the Delhi and Ajmer Rent Control Act, 1952 in so far as that Act applied to Delhi, as he companytinued to be a tenant of the rooms in spite of the decree in favour of Mehtab Singh of October 11, 1956. following five issues Whether the plaintiff is the owner of the premises in suit? Whether the defendant is in unauthorised occupation of the premises in dispute and is number a tenant in the same ? Whether the suit is barred under Section 19 of the Slum Area Clearance improvement Act, 1956 ? Whether the Civil Court has jurisdiction to try this suit ? Relief. On the first issue he held that the respondent had proved her ownership of the premises and this finding has number been challenged in any subsequent proceeding. He decided issues Nos. 2 and 3 together and -held that the real question involved in them was whether the appellant was a tenant. He observed that s. 2 I of the Delhi Rent Control Act, 1958 numberdoubt provided that a tenant for the purpose of the Act would number include any person against whom any order or decree for eviction has been made but he held that the words order or decree for eviction in the provision meant an executable decree or order. He then said that as the prescribed authority under the Slum Areas Act had refused permission to Mehtab Singh to execute his decree in ejectment,, that decree was number an executable decree and, therefore, it. companyld number be said that the appellant was number a tenant although a decree for eviction had been passed against him. In this view of the matter he held that the appellant must be deemed to have companytinued to be a tenant under Mehtab Singh and the respondent who was a transferee from Mehtab Singh had numberbetter rights in the properties than what Mehtab Singh had. Apparently, the learned Subordinate Judge held that after the respondent purchased the property, the appellant had become her tenant. He observed that if the companytention of the respondent that the appellant had ceased to be a tenant as a result of the decree was accepted, S. 19 of the Slum Areas Act would be rendered nugatory. He was number prepared to accept a view which led to such a result. As it was number in dispute that if the appellant was a tenant he had numberjurisdiction to entertain the suit in view of 9. 50 of the Act of 1958, the learned Subordinate Judge dismissed the suit for want of jurisdiction and decided issues Nos. 4 and 5 accordingly. The respondent appealed against this judgment to the High Court of Punjab. The High Court expressed the view that the words which we have quoted from the definition of tenant in S. 2 1 of the Act of 1958 applied even though the decree in ejectment had ceased to be executable as of right in view of the provision of s. 19 of the Slum Areas Act. It held that s. 50 of the Act of 1958 which barred the jurisdiction of a civil companyrt to entertain suits for ejectment against tenants did number take away the learned Subordinate Judges jurisdiction to try the respondents suit, for the appellant was numberlonger a tenant after the decree of October 11, 1956 directing his eviction. It appears also to have been argued before the learned Judges of the High Court that when an order in ejectment had once been made against a tenant, another order companyld number be passed against him respective of whether the earlier order was made in executable by a statute or number. Dealing with this argument, Dua J. who delivered the judgment of the Court, observed, This broad proposition, in my opinion, may number always hold good, but, in, any event, the institution of the suit and the jurisdiction of the civil companyrt to try the same can scarcely be held barred on this ground. Whether or number to pass a decree or order for eviction on the ground that such an order had already been passed, may have to be determined on the merits of the particular companytroversy on its own cir- cumstances, the question scarcely, affects the jurisdiction of the Court to entertain and try the suit. The High Court companycluded by saying, For the reasons foregoing, we are clearly of the view that the order of the Court below is erroneous and allowing the appeal we set aside the judgment and decree of the learned subordinate Judge and remit the case back to the trial companyrt for further proceedings in accordance with law, in the light of the observations made above. It would thus appear that the only point which the High Court decided was whether the Subordinate Judge had jurisdiction to try the suit. It refused to go into the question whether on the merits, the suit would succeed and remitted the case back to the Subordinate Judge apparently because be had number companysidered those merits, that is to -say, whether in view of the earlier ejectment decree a fresh ejectment decree companyld be passed. It is clear from what we have said about the judgment of the learned -Subordinate Judge that he had number in fact gone into the merits of the case and had only held that in view of s. 19 of the Slum Areas Act he had numberjurisdiction to entertain the suit as the appellant remained a tenant within the meaning of that word in the Act of 1958 numberwithstanding the decree in ejectment against him. In this appeal the only question that we have to companysider is whether the High Court was right in passing the order remanding the case to the learned Subordinate Judge for trial on the merits. That would depend on whether the High Court was right in its view that numberwithstanding s. 19 of the Slum Areas Act rendering the decree against him in executable, the appellant ceased to be a tenant within the meaning of the Act of 1958 because of that decree. Before proceeding to discuss the question, we think it proper to observe that if the High Court was right in its view about the appellant ceasing to be a tenant, it was fully justified in passing the order of remand. It was number called upon to decide -whether the suit might succeed on the merits. That question had number been decided by the learned Subordinate Judge and it did number strictly arise in the appeal before the High Court. The High Court was certainly entitled to the views of the learned Subordinate Judge on it. -We are unable to agree with the learned Subordinate Judge that a tenant remained a tenant in spite of the definition in s. 2 1 of the Act of 1958 and numberwithstanding a decree in ejectment earlier passed against him, because, in view of the refusal of the authority companycerned to grant sanctioned to execute the decree under s. 19 of the Slum Areas Act, that decree was for the moment in executable. The Act of 1958 quite clearly excluded from the definition of tenant a person against whom any order or decree for eviction had been made, that is to say, under it a tenant who had suffered a decree in ejectment was numbermore a tenant. Section 50 of this Act says, No Civil Court shall entertain any suit or proceeding in so far as it relates to eviction of any tenant under s. 14. Section 14 provides for an order in ejectment being made by the Controller appointed under the Act on any of the grounds mentioned in it but number otherwise. Section 50, therefore, bars the jurisdiction of a civil companyrt to try a suit for the eviction of a tenant, that is to say, a tenant as defined in the Act. It would number bar a suit for eviction against a person who is number a tenant as so defined. Under the ordinary law applicable to landlords and tenants, a tenant who has suffered an ejectment decree is number companysidered a tenant any more he has after the decree numbere of the rights which as tenant he earlier possessed. We find numberjustification for changing the definition of tenant -in the Act of 1958 by drawing upon the provisions of the Slum Areas Act as the learned Subordinate Judge did. The last mentioned Act is number companycerned with relations between landlords and tenants as such it does number purport to interfere directly with the ordinary companytractual rights of landlords and tenants either as to rent or as to recovery of possession. However, that may be, we find numberhing in S. 19 of the Slum Areas Act to which alone we were referred by learned companynsel for the appellant for the purpose to warrant the view suggested that a tenant within the Act of 1958 would include a tenant against whom a decree in ejectment has been passed. Section 19 only says that a person who has obtained a decree in ejectment against a tenant shall number be entitled to execute it without the previous permission of the prescribed authority. It does number say that a tenant suffering the decree still ,continues to be a tenant for any purpose. The section does number purport to define the word tenant in any way. It assumes that -a decree for eviction has been passed against a tenant. The expression decree or order for the eviction of a tenant in S. 19 necessarily companytemplates a person who was prior to the decree a tenant within the meaning of the Rent Act of 1958 or any of its predecessors. The section is number in any way companycerned with the question whether the tenants suffering a decree in ejectment still ,continue to be such tenants within the meaning of the Rent Act. It is of some importance to point out in this companynection that the Slum Areas Act making ejectment decrees against tenants in executable without the requisite permission came into existence before the Act of 1958. It is pertinent to observe that numberwithstanding this, the latter Act excluded from the definition of tenant one who had suffered an ejectment decree. Obviously, the Act of 1958 did number companytemplate that the Slum Areas Act would in any way affect the definition of tenant companytained in it. No question as to what the rights of a tenant again St whom a decree in ejectment has been passed in view of S. 19 of the Slum Areas Act are, arises in this appeal, the only point being whether his is a tenant within the Act of 1958 so as to oust the jurisdiction of a civil companyrt to entertain the suit. We think he is number, for S. 2 1 of the Act 5 51 of 1958 must be read by itself and its meaning cannot be affected by any companysideration derived from s. 19 of the Slum Areas Act. We may number refer to Jyoti Pershad v. The Administrator for the Union Territory of Delhi 1 to which our attention was drawn. That case is, in our view, of numberassistance. It deals with the companytention whether the Slum Areas Act was unconstitutional as it affected fundamental rights of landlords. That is number a question that arises in this appeal. This Court in its judgment numberdoubt stated that to buildings in slum areas both the Slum Areas Act and the Act of 1958 would apply and also that the forme Act afforded some protection to tenants against eviction. As we have earlier stated, we are number companycerned in this appeal with any question as to the protection given by the Slum Areas Act to tenants, number as to the result of the application of both the Acts to a particular case. This Court did number say that the result of applying both the Acts to a case was to make part of the definition of tenant in the Act of 1958 nugatory that was number a question that arose. All that the Court said was that a tenant was entitled to all such benefits as each Act independently companyferred on him. Again- when the judgment stated that the Slum Areas Act protected tenants, it did number purport to define the word tenant for the purpose of the Acts. This Court certainly did number say that numberwithstanding the definition in s. 2 1 of the Act of 1958 a person would remain a tenant within the meaning of that Act in spite of the order of eviction. That question did number arise for decision. This case does number help the appellant at all. It was then pointed out that s. 50 of the Act of 1958 also provided that numbercivil companyrt shall entertain any proceeding in so far as it relates to any matter which the Controller is empowered by or under this Act to decide It was said that s. 25 of that Act provided that when an order has been made by the Controller for recovery of possession of premises from a tenant, he will give vacant possession of the premises to the landlordd by removing all persons in possession thereof. It was companytended that in view of these two provisions the learned Subordinate Judge had numberjurisdiction to entertain the respondents suit. This argument seems to us to proceed on a misapprehension. First, we do number think that the argument companyrectly states the effect of s. 25. ,It seems to us that all that the section does is to state who shall be bound by an order of eviction passed by the Controller and how effect shall be given to it. It is unnecessary, however, to express a final opinion on the effect of s. 25, for, in any event, clearly 1 1962 2 S.C.R. 125. 5 52 s. 42 of the Act provides that the Controller shall have power to execute orders made under the Act. If the Controller has the power to execute orders made under the Act including orders for eviction -and that is all that learned companynsel for the appellant number companytends-all that will happen in view of that part of s. 50 of the Act of 1958 on which reliance is number placed is that a civil companyrt will number be able to execute an order for eviction. This however has numberhing to do with the point before, us. The learned Subordinate Judge was number asked to execute any decree for eviction. He was asked to decide whether the appellant was a trespasser and so liable to eviction. It does number follow that because a civil companyrt cannot execute a decree for eviction passed by the Controller, it cannot also decide the question whether a tenant against whom such an order has been passed has ceased to be a tenant and become a trespasser. The present companytention, therefore, must be rejected. We are told that after the High Court had passed its order of May 12, 1964 remanding the case to the Subordinate Judge for trial on the merits, the Subordinate Judge heard the suit and passed a decree in favour of the respondent on August 12, 1964. This, if companyrect, must have happened because numberorder for stay of the proceedings pursuant to the order of remand had been obtained from the High Court. A plain companyy of the judgment of the learned Subordinate Judge of August 12, 1964 was handed over to us by learned companynsel for the appellant and from that it appears that he thought that since the High Court had held that the appellant was number a tenant within the meaning of the Act of 1958 after the decree in ejectment of October 11, 1956, it must be held that the respondents companytention that the appellants possession of the rooms was unauthorised was companyrect. It is for this reason that the learned Subordinate Judge appears to have passed his decree for eviction of the appellant of August 12, 1964. We wish, however, to observe that we are number aware that the companyy of the judgment is a companyrect companyy. We have referred to it only to say that even if companyrect, it doe-, number affect the question which we have to decide. We are also informed that the appellant has filed an appeal in the High Court from this judgment of the learned Subordinate Judge and that appeal is pending. It will be-for the High Court number to decide the companyrectness of the decree of the learned Subordinate Judge of August 12, 1964 and it is number right that we should express any opinion on that question and we do number so.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 156 of 1965. Appeal by special leave from the judgment and order dated August 12, 1963 of the Bombay High Court Nagpur Bench in Special Civil Application No. 315 of 1962. P. Sathe and A. G. Ratnaparkhi, for the appellants. N. Phadke, J. B. Dadachanji, O.C. Mathur and Ravinder Narain, for respondents Nos. 1 and 3. S. Bindra and B. R. G. K. Achar, for respondent No.4. The Judgment of the Court was delivered by Satyanarayana Raju, J. This is an appeal, by Special Leave,, against the judgment of a Division Bench of the Bombay High Court dismissing an application for the issue of a Writ of certiorari under Art. 226 of the Constitution to quash the order of the State Industrial Court at Nagpur. For a proper appreciation of the questions that have been raised in the appeal, it would be necessary to state the material facts. The Model Mills, Nagpur hereinafter referred to as the Mills is a public limited companypany incorporated under the Indian Companies Act. On July 18, 1959, in exercise of the powers companyferred by s. 18-A of the Industries Development and Regulation Act, 1951, the Central Government took over the management of the Mills and appointed the 3rd respondent as the authorised Controller of the Mills. On March 25, 1960 the State of Bombay number the State of Maharashtra , in exercise of the powers companyferred by ss. 3 and 4 of the Bombay Relief Undertakings Special Provisions Act, 1958 hereinafter referred to as the Bombay Act made a numberification declaring the Mills to be a relief undertaking for a period of one year companymencing from March 26, 1960 and ending with March 25, 1961. The appellants, eight in number, were, at the relevant time, the permanent employees of the Mills. It would be companyvenient to refer to them as employees. On December 15, 1960, when the numberification made by the State Government under the Bombay Act was in force, the employees abstained from work. Thereupon, the 1st respondent who is the Factory Manager of the Mills issued numberices to the employees to show cause why they should number be dismissed from service for joining an illegal strike. On January 6, 1961 the Factory Manager passed orders dismissing the employees from service. On January 12, 1961 the employees filed an application in the High Court of Bombay for the issue of a writ of mandamus directing the employees to be reinstated in service. On April 4, 1961, the exemption of the Mills from the application of s. 16 of the Central Provinces and Berar Industrial Disputes Settlement Act XXIII of 1947 herein- after called the State Act was made. On April 25, 1961 the employees filed applications before the Assistant Commissioner Sup.CI./76-12 of Labour claiming reinstatement with back wages. The High Court dismissed the Writ Petition filed by the employees with liberty to file a fresh petition, if necessary, since they were prosecuting their applications for relief of reinstatement before the Assistant Commissioner of Labour. In and by his order dated September 29, 1961, the Assistant Commissioner allowed the applications filed by the employees. He held that as there was numberillegal strike the orders of dismissal were unsustainable and should be set aside. He directed that the employees should be reinstated with back wages. Against the orders passed by the Assistant Commissioner, the Mills preferred applications in revision to the State Industrial Court. By its order dated February 16, 1962, the Industrial Court allowed the revision applications filed by the Mills on the ground that the applications before the Assistant Commissioner were number maintainable. On the merits, the Industrial Court agreed with the Assistant Commissioner that there was numberillegal strike. Aggrieved by the orders of the Industrial Court, the employees filed an applicaton under Arts. 226 and 227 of the Constitution for the issue of a writ of certiorari to quash the orders of dismissal passed by the Factory Manager and to direct their reinstatement with back wages. By its judgment dated August 12, 1963 the High Court dismissed the Writ Petition filed by the employees. The High Court has held that the right to claim reinstatement is number a right which is available to an employee under the Common Law and that the relief of reinstatement is a special right which has been companyferred on an employee under S. 16 of the State Act. In the opinion of the High Court, the essential pre-condition for an employee to claim relief under S. 16 is that he is an employee in an industry to which that section is applicable and in respect of which a numberification under S. 16 1 also has been issued. The High Court has reached this companyclusion by reason of the fact that the State Government issued a numberification exempting the Mills from the operation of S. 16 of the State Act and that the exemption was withdrawn only on April 4, 1961 while the employees were dismissed on January 6, 1961. In the opinion of the High Court, by reason of the fact that s. 16 of the Act was number applicable, the dismissal of the employees even if it was wrongful did number give them a right to claim TV instatement and that to hold otherwise would be to give retrospective operation to S. 16 of the State Act which became applicable to the Mills on and from April 4, 1961 by reason of the withdrawal of the exemption. in the result, the High Court companyfirmed the finding of the State Industrial Court that the employees had numberright to file applications under s. 16 of the State Act and the applications filed by them before the Assistant Commissioner were number maintainable. Now it is companytended by Mr. V. Sathe on behalf of the employees that though the industry was exempt from the operation of certain sections including s. 16 of the Act, on the date when the appellants were dismissed, there was an existing industrial dispute relating to an industrial matter between the employees and the Mills on April 4, 1961, when the numberification withdrawing the exemption in favour of the Mills from the operation of s. 16 of the State Act was issued by the Government, that on the date when the employees filed an application under s. 16 before the Commissioner of Labour, the period of six months provided by that section had number elapsed and that therefore the employees companyld invoke the provisions of s. 16 and claim reinstatement. The learned companynsel for the Mills, Mr. Phadke, has endeavoured to support the judgment of the High Court and the reasons on which its companyclusions were rested. The questions which arise for determination in this appeal are Whether the right of a dismissed employee to claim reinstatement, in appropriate cases, exists. de hors s. 16 of the State Act ? Whether by reason of the State Governments exemption of the industry from the operation of s. 16 on the date when the employees were dismissed from service, their right to apply for reinstatement ceased to exist ? For a proper determination of the above questions, it is necessary to refer to the material statutory provisions. The State Act became law on June 2, 1947. S. 15 of the State Act empowers the State Government to appoint any person as Labour Commissioner for the State and he shall exercise all or any of the powers of the Labour Commissioner. Now s. 16 of the State Act as it stood at the relevant date provides as follows Where the State Government by numberification so directs, the Labour Commissioner shall have power to decide an industrial dispute touching the dismissal, discharge, removal or suspension of an employee working in any industry in general or in any local area as may be specified in the numberification. .lm15 Any employee, working in an industry to which the numberification under sub-section 1 applies, may, within six months from the date of such dismissal, discharge, removal or suspension, apply to the Labour Commissioner for reinstatement and payment of companypensation for loss of wages. The different powers that companyld be exercised by the Labour Commissioner are then set out in sub-s. 3 On receipt of such application, if the Labour Commissioner, after such enquiry as may be prescribed, finds that the dismissal was in companytravention of any of the provisions of this Act or in companytravention of a standing order he may direct that the employee shall be reinstated forthwith or by a specified date and paid for the whole period from the date of dismissal to the date of the order of the Labour Commissioner. It is companymon ground that s. 16 is made applicable to the textile industry with effect from. March 1, 1951 by a numberification dated February 22, 1951. The provisions of s. 16 were thus applicable to the Mills till March 25, 1960, on which date, however, the State Government issued a numberification in exercise of the powers companyferred under ss. 3 and 4 of the Bombay Act declaring the Mills to be a relief undertaking. The numberification directed that the provisions of S. 16 of the State Act and Chapter V-A of the Industrial Disputes Act XIV of 1947 Lay-off and Retrenchment shall number apply to the Mills and that it shall be exempt therefrom. This numberification was extended by the State Government on March 8, 1961 for a further period of one year. A subsequent numberification dated April 4, 1961 issued by the State of Bombay amended the earlier numberification by withdrawing the exemption in so far as it related to s. 16 of the State Act. The alleged participation by the employees in an illegal strike occurred on December 15, 1960 and the 1st respondent dismissed the employees in and by his order dated January 6, 1961. It was during the period between March 25, 1960 and April 4, 1961 when the exemption was in force that the incident which resulted in the Mills framing a charge against the employees happened and the subsequent orders of dismissal were passed. It is submitted by the learned companynsel on behalf of the Mills that the right of an employee to claim reinstatement has been granted by s. 16 of the State Act and since the Mills were exempt from the provisions of that section on the material dates the employee had numberright to claim reinstatement. The Industrial Disputes Act XIV of 1947 came into force on April 1, 1947. For our present purposes, it is number necessary to companysider whether the right to claim reinstatement by a dismissed employee existed before the Central Act became law. The question about the jurisdiction of an Industrial Tribunal to direct reinstatement of a dismissed employee was raised as early as 1949, before the Federal Court in Western India Automobile Association v. Industrial Tribunal, Bombay 1 . In that case, the Federal Court companysidered the larger question about the powers of industrial tribunals in all its aspects and rejected the argument of the employer that to invest the tribunal with jurisdiction to order reinstatement amounts to giving it authority to make a companytract between two persons when one of them is unwilling to enter into a companytract of employment at all. This argument, it was observed, overlooks the fact that when a dispute arises about the employment of a person at the instance of a trade union or a trade union objects to the employment of a certain person, the definition of industrial dispute would companyer both those cases. In each of those cases, although the employer may be unwilling to, do, there will be jurisdiction in the tribunal to direct the employment or number-employment of the person by the employer. The Federal Court also added The disputes of this character being companyered by the definition of the expression industrial disputes, there appears numberlogical ground to exclude an award of rein- statement from the jurisdiction of the Industrial Tribunal. For nearly two decades the decision of the Federal Court has been accepted without question. Therefore, after the Industrial Disputes Act, 1947, at any rate, the right of a dismissed employee to claim reinstatement in proper cases has been recognised. It is numberdoubt true that under the Central Act the right to claim reinstatement has to be enforced in the manner laid down by that statute, whereas under the State Act it is open to an employee to claim reinstatement without the intervention of the appropriate Government. This would number however make any difference. It is argued that by reason of the exemption granted by the Bombay State when it declared the Mills to be a relief undertaking, rights and obligations which accrued to the employees or were incurred by the Mills during the period of exemption, stood 1 1949 F.C.R. 321. abrogated. This takes us to the question as to the legal effect of the exemption granted by the State of Bombay. The numberification issued by the State of Bombay is in the following terms The Government of Bombay hereby directs that in relation to the said relief undertaking and in respect of the said period of one year for which that relief undertaking companytinues as such, the provisions of i Sections 16, 31 and 37, section 40 in so far as it relates to lock-out and section 51 and section 61 in so far as it relates to clauses b and c of Rule 36 of the Central Provinces and Berar Industrial Disputes Settlement Rules, 1949 Central Provinces and Berar Act No. XXIII of 1947 and ii Chapter V-A of the Industrial Disputes Act, 1947 XIV of 1947 shall number apply and the said relief undertaking shall be exempt from the aforesaid provisions of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947 Central Provinces and Berar Act No. XXIII of 1947 and the Industrial Disputes Act, 1947 XIV of 1947 . The companytention urged on behalf of the Mills proceeds on the assumption that the right to claim reinstatement has been granted by S. 16 of the State Act. As we have already stated, S. 16 only recognises the right of a dismissed employee, in appropriate cases, to claim reinstatement but does number companyfer the right. The section provides the procedure for enforcing the right. In this view, the right of the dismissed employee to claim reinstatement was in existence even during the period of exemption, but only it companyld number be enforced under S. 16. Once the exemption is withdrawn the status quo ante is restored and it is open to the employee to file an application for reinstatement provided, however, his application is within the period of six months from the date of his dismissal. Under S. 4 1 a , on a numberification being made, the industry becomes a relief undertaking and the laws enumerated in the Schedule to the Bombay Act shall number apply. The Schedule specifies Chapter V-A of the Industrial Disputes Act and S. 16 of the State Act. Section 4 1 a also provides that the relief undertaking shall be exempt from the operation of the Acts mentioned in the Schedule. Learned companynsel drew a distinction between the expressions exemption and suspension by relying upon the meanings given to these words in the Oxford Dictionary. Exempton means immunity from a liability whereas the word suspension means put it off. Basing himself on the dictionary meanings, learned companynsel for the Mills has companytended that the word exemption is of a wider companynotation than suspension and means that the industry shall be immune from the liabilities arising under the statutes specified in the Schedule and that the order of dismissal having been passed while the exemption was in force, the Mills were immune from liability to reinstate the employees on their dismissal being held to be wrongful. The order dismissing the employees was passed on January 6, 1961 when the numberification was in force. The employees filed applications before the Commissioner of Labour on April 25, 1961. On the date of their applications, the exemption granted to the Mills by the State Government was numberlonger in operation. The decision in Birla Brothers, Ltd. v. Modak 1 has firmly established the principle that for a dispute which originated before the Industrial Disputes Act came into force but was in existence on the date when that Act became law, the Act applied to the dispute since it was in existence and companytinuing on that date and numberquestion of giving retrospective effect to the Act arose. At p. 22 1, the learned Chief Justice, Harries, who spoke for the Court stated thus In my judgment, the Act of 1947 clearly applies to the present dispute without any question arising of giving the Act any retrospective effect. It is true the dispute arose before the Act was passed, but on April 1, 1947, when the Act came into force, the dispute was in existence and companytinuing. The employees were on strike and the strike actually companytinued until May 19, that is, five days after the Government made the order referring the dispute to arbitration. In my judgment, the Act must apply to any dispute existing after it came into force, numbermatter when that dispute companymenced. There is numberhing in the Act to suggest that it should apply only to disputes which originated after the passing of the Act. On the companytrary, the opening words of s.10 of the Act make it clear that the Act would apply to all disputes existing when it came into force. The opening words of s. 10 1 are--- If any industrial dispute exists or is apprehended, the appropriate Goverment may, by order in writing etc. L.L.R. 1948 2 Cal. 209. It seems to me that these words make it abundantly clear that the Act applies to any industrial dispute existing when it came into force and, therefore, the Act applies to this dispute. It is argued by Mr. Phadke that the, numberification dated April 4, 1961 withdrawing the exemption is only prospective and numberretrospective effect can be given to it. This argument proceeds on a fallacy. There is numberquestion of the numberification withdrawing an exemption being prospective or retrospective. It is finally submitted by learned companynsel for the Mills that the validity of the order passed by the Factory Manager dismissing the employees from service has number been determined by the High Court and that the matter must be remitted to that Court for a companysideration of that question. We may point out that the Assistant Commissioner of Labour has held that the dismissal is wrongful. This companyclusion is affirmed by the Industrial Court. The validity of the dismissal was therefore finally companycluded in favour of the employees. There is therefore numberquestion of the validity of the dismissal order number being companysidered by the High Court. We may number summarise the companyclusions reached by us as a result of the above discussion. The right of an employee to claim reinstatement on a wrongful dismissal exists de hors s. 16 of the State Act. Section 16 provides a forum for a dismissed employee to claim reinstatement but does number create a right. The effect of an exemption granted by the numberification issued under the Bombay Act is number to destroy the right but to suspend the remedy prescribed by s. 16 for enforcing that right during the period when the exemption remains in force. The right can be enforced by a dismissed employee by resorting to the provisions of s. 16 of the Act provided he makes the application within six months from the date of his dismissal. In the present case, the appellants filed their applications within the period specified in S. 16 of the State Act. The High Court was in error in holding that the applications were number maintainable. In the result the judgment of the High Court and the order of the Industrial Court are set aside and the award made by the Assistant Commissioner of Labour is restored. The appeal is allowed and the appellants will have their companyts in this Court paid by respondent No.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 512 of 1964. Appeal from the judgment and decree dated December 23, 1960 of the Allahabad High Court in Income-tax Misc. Case No. 475 of 1954. V. Viswanatha Sastri, 4. Ganapathy lyer, R. H. Dhebar and R.N. Sachthey, for the appellant. T. Desai, and J. P. Goyal, for the respondent. The Judgment of the Court was delivered by Shah, J. Under an agreement dated January 2, 1931, Lab Manmohan Das-hereinafter called the assessee-was appointed Treasurer of the Allahabad Bank Ltd. in respect of certain Branches, Sub-Agencies and Pay Offices. The assessee was assessed to income-tax as representing his Hindu undivided family, and the income received by the assessee under the terms of the agreement with the Allahabad Bank, was treated as income of the Hindu undivided family. In the previous year companyresponding to the assessment year 1950-51 the assessee in performing his duties as a Treasurer suffered a net loss of Rs. 38,027. For the assessment year 1951-52, the profit and loss account of the assesses showed Rs. 73,815 as receipts, against which were debited outgoings amounting to Rs. 39,370 which included Rs. 20,000 being the loss suffered by the assessee as Treasurer of the Patna Branch of the Allahabad Bank arising from misappropriation by an Assistant Cashier. The Income-tax Officer refused to allow the loss suffered in the previous year to be set off against the net profit of Rs. 34,445 and brought that amount of profit to tax as remuneration received by the assessee as Treasurer of the Allahabad Bank. The order of the Income- tax Officer was companyflrmed in appeal by the Appellate Assistant Commissioner. The 5 33 Income-tax Appellate Tribunal held that the remuneration received by the assessee as Treasurer of the Allahabad Bank was income arising from pursuit of a profession or vocation within the meaning of s. 10 of the Act and the loss suffered during the preceding year was liable to be set off against the assessees income from that source in the year under companysideration. At the instance of the Commissioner of Income-tax, U.P., the following questions were referred to the High Court of Allahabad under s. 66 1 of the Income-tax Act, 1922 Whether on a true interpretation of the deed of agreement dated 2nd January, 1931, appointing the assessee as Treasurer of the Allahabad Bank Limited, income earned by the assessee from his activities as such Treasurer fell to be companyputed under Section 10 of the Act or Section 7 or Section 12 of the Income- tax Act ? If the answer to this question is that such income is liable to be companyputed under Section 10 of the Act, Whether the assessee companyld claim a set off of the loss suffered by him in the preceding year 1950-51 against his profits in the year under companysideration, i.e., 1951-52 having failed to prefer an appeal against the refusal by the Income-tax Officer making the assessment for the year 1950-51 to allow the assessee to carry forward the loss under Section 24 2 of the Act ? The High Court held that the remuneration received by the from the Allahabad Bank was income liable to be taxed under s. 10 of the Income-tax Act, and that the assessee companyld claim to set off the loss companyputed in the assessment year 1950-51 against the profit in the subsequent year. With certificate granted by the High Court, this appeal has been preferred by the Commissioner of Income-tax. The second question presents little difficulty. In making his order of assessment for the year 1950-51 the Income-tax Officer declared that the loss companyputed in that year companyld number be carried forward to the next year under s 24 2 of the Income-tax Act, as it was number a business loss. The Income-tax Officer has under s. 24 3 to numberify to the assessee the amount of loss as companyputed by him, if it is established in the companyrse of assessment of the total income that the assessee has suffered loss of profits. Section 24 2 companyfers a statutory right subject to certain companyditions which are number material upon the assessee who sustains a loss of profits in any year in any business, profession or vocation to carry forward L3Sup. Cl/66-4 5 34 the loss as is number set off under sub-s 1 to the following year, and to set it off against his profits and gains, if any, from-,the same business, profession or vocation for that year. Whether the loss of profits or gains in any year may be carried forward to the following year and set off against the profits and against the same business, profession or vocation under s. 24 2 has to be determined by the Income-tax Officer who deals with,the assessment of the subsequent year. It is for the Income-tax Officer dealing with the assessment in the subsequent year to determine whether the loss of the previous year may be set off against the profits of that year. A decision recorded by the Income-tax Officer who companyputes the loss in the previous year under s. 24 3 that the loss cannot be set off against the income of the subsequent year is number binding on the assessee. The answer to the first question depends upon the true interpretation of the terms of the agreement between the Allahabad Bank and the assessee If under the terms of the agreement it is found that the assessee was carrying on a business, profession or vocation, the assessee would be entitled to carry forward the loss suffered therein and set it off against the profits in the subsequent year of the same business, profession or vocation under s. 24 2 . If the remuneration was received by the assessee as a servant of the Bank, and on that account has to be companyputed under s. 7 of the Act, the right to set off the loss cannot be claimed under s. 24 2 . The fact that the assessee held an office is however number decisive of the question whether remuneration earned by him was as a servant of the. Allahabad Bank. Receipt of remuneration for holding an office does number necessarily give rise to a relationship of master and servant between the holder of the office and the person who pays the remuneration. The agreement is between the Allahabad Bank Ltd., and Lala Manmohan Das-called in the agreement- Treasurer, and the expression Treasurer includes his heirs and representatives.-By cl. 2 it is recited that the Treasurer is appointed for the Banks Branches and Sub-Agencies and Pay Offices mentioned therein and such other offices in other parts of India for which he may be appointed, and that the Treasurer has agreed to provide security to the Bank for the discharge and performance of his duties and obligations to the Bank. The agreement I then proceeds to set out the companyditions of the agreement, the following of which are relevant The Treasurer shall serve, the Bank as Treasurer for its Branches,, Sub-Agencies and Pay Offices until, this agreement is determined as hereinafter provided. The remuneration of the. Treasurer shall be a monthly allowance for each of the Branches, SubAgencies and Pay Offices the total of such monthly allowance to be Rs. 2,250 Rupees two thousand two hundred and fifty plus Rs. 350 Rupees three hundred fifty for travelling expenses. The duties, liabilities and responsibilities of the Treasurer to the Bank shall be such as either by custom or companytract usually devolve on a Treasurer in the service of the Bank including the duties, liabilities and responsibilities hereinafter mentioned and the Treasurer shall faithfully discharge his duties and duly perform his obligations to the Bank. The Treasurer shall with the approval of the Bank appoint at adequate salaries to be paid by the Bank all the Indian staff as may be company- sidered sufficient by the Bank for the business of the Cash Department of the Banks Branches, Sub-Agencies and Pay Offices . . . and shall dismiss any person or persons so appointed whom he shall be reasonably directed by the Bank to dismiss and shall with like approval appoint another or others in the place of person or persons so dismissed. The Treasurer shall be deemed to have appointed the present staff of the Cash Department of the Branches, Sub-Agencies and Pay Offices aforesaid. Provided always that the Bank shall accept any proposal of the Treasurer for transfer, suspension or dismissal of any member of the Cash staff in the Bank. The Treasurer shall be responsible to the Bank for the work and companyduct of every person to be appointed or employed on his staff and shall make good to the Bank any loss or damage sustained or incurred by the Bank from any embezzlement, theft, fraud, misappropriation, misconduct, mistake, omission, negligent act or default of any such person or persons. The Treasurer shall keep under his care and supervision or that of his staff the moneys, cash bullion, securities, cheques, numberes, hundies, drafts, orders and other documents or property which may from time to time be entrusted to him at the Branches, Sub-Agencies and Pay Offices and shall whenever so required to do so transmit from one place to another place under such guard as may be provided by the Bank all such money, documents or properties and shall be responsible for the care and proper custody of the same while in transit. Thai the Bank shall for the efficient working of its Cash Department provide proper iron safes and a strong room in each of the said Branches, Sub- Agencies and Pay Offices and the Treasurer shall be responsible to the Bank for any loss occasioned to the Bank through the negligence, malfeasance or misfeasance of any of his servants or agents by the payment or delivery of any money, document or property aforesaid to a wrong person whether owing to forgery, mistake, fraud or otherwise. The Treasurer shall be responsible for the companyrectness and genuineness of all hundies, cheques, drafts, securities, vouchers, documents, writing and signature in an Indian language or character which the Treasurer or any of his staff may accept and certify as genuine and companyrect and shall make good to the Bank any loss or damage from any forged instrument or signature on a document as dealt with and shall also be liable for any loss occasioned to the Bank by receipt of any bad or base-money companyn or bullion or any forged or fraudulently altered currency numbere. The Treasurer shall number number shall any substitute or any one of the staff of the Treasurer publish or divulgeany of the business affairs or transactions of the Bank or any of its companystituents. The Treasurers employment may be determined at any time by either party giving to the other three calendar months written numberice to that effect, and in case of the Treasurers death, this agreement as regards the Treasurers liabilities and obligations for the staff and other persons shall remain in force so as to bind his heirs, representatives and estate for any loss then accrued or accruing claim of the Bank hereunder but also for any future claim of the Bank in respect of any subsequent transaction or occurrence unless and 5 37 A until determined by his heirs or representatives giving like numberice to the Bank. The agreement companytains certain peculiar companyenants for instance, the expression Treasure includes the heirs and representatives and except where the companytent may justify a companytrary implication, the rights, obligations and liabilities of the Treasurer would apparently be enforceable by or be enforced against the heirs and legal representatives of the assessee. The Treasurer is entitled under the terms of cl. 4 to transfer, suspend and dismiss any member of the staff in the cash department of the Bank and his recommendation in that behalf has to be accepted by the Bank. The Treasurer has if reasonably directed by the Bank, but number otherwise, to dismiss any member of the Indian staff appointed by him, and to appoint another in the place of the person so dismissed. The staff in the Cash department is referred in cls. 5 , 6 7 as the Treasurers staff. Under cl. 4 all the staff originally in the employment of the Bank at the date of the agreement and 3 the staff subsequently appointed were to be paid by the Bank, but the Treasurer was to stand responsible for any loss or damage which may be sustained number only for embezzlement, theft, fraud, misappropriation, misconduct, but even for mistake, omission, negligent act or de-fault of any member of the staff. The Treasurer has by the agreement undertaken to keep the moneys, cash, bullion, securities, cheques, numberes, hundies, drafts, orders, and other documents or property under his care and supervision through his staff, and is liable to protect the property of the Bank in his custody, and has to make good any loss occasioned to the Bank by the negligence, malfeasance or misfeasance of any of his servants or agents even though number belonging to the Cash Department. The Treasurer is responsible for the companyrectness and genuineness of all hundies, cheques, drafts, securities, vouchers, documents, writing and signature in an Indian language and he is responsible for any loss or damage from any forged instrument or signature on a document dealt with by his staff, and also for any loss arising from receipt, of any bad or base-money companyn or bullion or any forged or fraudulently altered currency numbere. It may be numbericed that the liability imposed under that companyenant is for the acts of the staff appointed by him or deemed to have been appointed by him within the meaning of cl. 4 , and also for loss arising from the receipt of any bad or base-money companyn or bullion or any forged or fraudulently altered currency numbere by any person employed by the Bank. The agreement also companytemplates that the Treasurer may appoint any substitute to carry on the work of the Bank. The Treasurer is under the agreement responsible for the acts of the Indian staff at the Branches, SubAgencies and Pay. Offices as far apart as Calcutta, Lahore, Lucknow, Patna, Amritsar, Benaras and Secunderabad. On a fair reading of the terms of the agreement it appears that the Treasurer had to provide the staff for the cash section he had power to suspend, transfer or dismiss any member of the staff or to appoint another person in his place he had to perform the duties, liabilities and responsibilities which by custom or companytract usually devolve upon a Treasurer and the duties specified in the agreement, and he was responsible for all acts of the staff so appointed which result in loss or damage to the Bank. The Treasurer was also responsible for the protection of the property of the Bank and was also responsible for receipt of any bad or base-money companyn or bullion or any forged or fraudulently altered currency numbere. Personal attendance by the Treasurer and supervision over the staff in the cash section in all the Branches and Pay Offices being in the very nature of things impossible, it was open to the Treasurer to appoint his own agents to supervise the work of the cash section. An office of Treasurer was undoubtedly created by the agree- ment. It is recited in cl. 1 that the Treasurer shall serve the Bank and in cl. 3 that the duties, liabilities and responsibilities I of the Treasurer shall be such as by custom or companytract usually devolve on a Treasurer in the service of the Bank. For performing these duties there is a fixed remuneration which is paid to the Treasurer, beside the travelling expenses. But the use of the expressions serve., the Bank and in the service of the Bank have to be read in the setting of the other companyenants. By them- I selves they are number decisive of the intention of the parties to the agreement. The office of the Treasurer can be determined only by numberice on either side of a duration of three months, and even on the death of the assessee, the Treasurers obligations accrued or accruing during his life- time, and future claims in respect of any transactions, even subsequent to his death, remain enforceable. Express reference to liability of the Treasurer for future claims for subsequent transactions clearly indicates that the agreement does number companye to an end by the death of the assessee it is determined only by numberice of three months duration. Liability for transactions subsequent to the death of the person for the time being acting as Treasurer remaining enforceable, it is reasonable to infer that the right to receive remuneration would tenure to the person who would step into the office of the Treasurer. The office of Treasurer is therefore to be held by the assessee, and After his death by, his heirs and legal representatives. It is unnecessary to companysider whether the agreement would be determined by any supervening disability of the Treasurer, which may render the companytract impossible of performance. But the Treasurer holds the office number as a servant of the Bank. The Treasurer has unquestionably undertaken very onerous responsibilities. There is however numbercovenant which authorises the Bank to companytrol the Treasurer in the due performance of duties undertaken by him under the terms of the agreement. Business of the Bank has undoubtedly to be carried on in the manner numbermally done by the Banks, and the duties, liabilities and responsibilities of the Treasurer are to be such as either by custom or companytract usually devolve on a Treasurer. The Bank pays the Indian staff in the Cash Department, but the companytrol is of the assessee. He has companytrol over the staff appointed by him or deemed to be appointed by him he has therefore the power to initiate proposals for transfer, suspension or dismissal of any member of the cash staff. This Court in Dharangadhara Chemical Works Ltd. v. State of Saurashtra 1 observed The principles according to which the relationship -as between employer and employee or master and servant has got to be determined are well settled. The test which is uniformly applied in order to determine the relationship is the existence of a right of companytrol in res- pect of the manner in which the work is to be done. A distinction is also drawn between a companytract for service and a companytract of service and that distinction is put in this, -.,way. In the one case the master can order or require what is to be done while in the other case he cannot only order or require what is to be done but how itself it shall be done. After referring to a large number of cases the Court observed P.- 160 The nature or extent of companytrol which is requisite to establish the relationship of employer and employee must necessarily vary from business to business and is by its very nature incapable of precise definition. it is number necessary for holding that a person is an employee, that the employer should be proved to have -exercised companytrol over his work, that the test of companytrol 1 1957 S.C.R., 152, 157. 54 0 was number One of universal application and that there were many companytracts in which the master companyld number companytrol the manner in which the work was done. The companyrect method of approach, therefore, would be to companysider whether having regard to the nature of the work there was due companytrol and supervision by the employer or. to use the words of Fletcher Moulton, L.J., at page 549 in Simons v. Health Laundry Company- 1910 1 B. 543 . . . it is impossible to lay down any rule of law distinguishing the one from the other. It is a question of fact to be decided by all the circumstances of the case. The greater the amount of direct companytrol exercised over the person rendering the services by the person companytracting for them the stronger the grounds for holding it to be a companytract of service, and similarly the greater the degree of independence of such companytrol the greater the probability that the services rendered are of the nature of professional services and that the companytract is number one of service. Under the companytract the Treasurer had to procure due performance of the duties of the Cash Department by employees under his supervision and that he was to be responsible for all acts done by them and to make good the loss which may result from any embezzlement, theft, fraud, misappropriation, mistake, misconduct, omission, negligent act or default of any such person. In carrying out his duties under the companytract apparently he was number to be companytrolled or supervised by the Bank. The companytract was therefore ,one for service and the Treasurer companyld number be called a servant of the Bank. But Mr. Sastri on behalf of the Revenue companytended relying upon Shivnandan Sharma v. The Punjab National Bank Ltd. 1 and Piyare Lal Adishawar Lal v. Commissioner of Income-tax, Delhi 2 , that under the companytracts substantially similar to the companytract in this case, Treasurers were held merely to be servants of the Banks, business whereof they attended. It is true that in each of these cases this Court in interpreting a companytract in which a Treasurer was appointed to supervise the Cash Department of a Bank, held that the Treasurer was a servant of the Bank, and number an independent companytractor. But unless the terms of the companytracts 1 19551 S.C.R. 1427. 2 1960 3 S.C.R. 669. and the circumstances in which they are made are identical, interpretation of one companytract cannot be regarded as a guide for determining the intention of parties to another companytract. In Shivnandan Sharmas case 1 the position of a Treasurer of a Bank fell to be determined somewhat indirectly. Shivnandan -a head cashier in one of the branches of the Punjab National Bank-appointed by the Treasurer who was in charge of the Cash Department of the Bank under an agreement between the Bank and the Treasurer, was dismissed from the service by the Bank. In a reference made to the Industrial Tribunal of certain industrial disputes including one for reinstatement of Shivnandan, it was held by this Court that under the terms of the agreement between the Treasurer and the Bank, the Treasurer was the servant of the Bank and number an independent companytractor. In companyning to that companyclusion the Court was substantially guided by the companyenants which reposed the direction and companytrol over Shivnandan and of the ministerial staff in charge of the Cash Department in the Bank. The companyenants of the agreement between the Treasurer and the Bank disclosed that the Treasurer had agreed to serve the Bank and to obey and observe all lawful orders and instructions of the Bank and to carry out such duties and to discharge such responsibilities as usually devolve upon a Treasurer in the employment of the Bank and in companysideration thereof to receive remuneration mentioned in the Schedule. The Treasurer and his numberinees were bound as expressly stipulated to obey all the orders, rules, and regulations prescribed by the Bank with regard to the discharge of their duties by the cashiers as well as with regard to the amount of balance they were allowed to keep with them. The Bank was also given power in case of gross negligence or misconduct or of any fraud, misappropriation or embezzlement by the Treasurer or any of the numberinees in the discharge of their duties to dispense with the services of the Treasurer forthwith. The Treasurer was number to engage any person as his assistant or, peon about whose character, companyduct or reliability the manager of the Board of Directors of the Bank may have any objection. Shivnandan was a numberinee of the Treasurer, but from the terms of his employment it appeared that he was working directly under the companytrol and supervision of the Punjab National Bank. This Court held that the Treasurers relation to the Bank was that of a servant to the master, and the ministerial staff of the Cash Department appointed by him were also the employees in the Cash Department. It is difficult to regard the agreement in Shivnandan Sharmas case 1 as even substantially similar to 1 19551 S.C.R. 1427. the agreement in the present case between the Allahabad Bank and the Treasurer, so as to make the interpretation of the agreement a guide or a precedent in the interpretation of the agreement before us. In Piyare Lal Adishwar Lals case 1 , one Sheel Chandra was appointed Treasurer of the Central Bank for various branches on a monthly salary. Under the agreement between Sheel Chandra and the Bank, Sheel Chandra had to engage and employ all subordinate staff. He had the power to companytrol, dismiss and change the staff at his pleasure, but he companyld number engage or transfer any member of the staff except with the approval of the Bank and he had to dismiss any such member if so required by the managing director of the Bank or Agent of the office. The Treasurer was responsible for the acts and omissions of his representatives-whom he was entitled to appoint at the various branches with the approval of the Bank, and he had agreed to indemnify the Bank against any loss arising from any neglect or omission on their part. But the Treasurer and his staff were under the direct companytrol of the Bank. The agreement which was terminable by three calendar months numberice in writing by either side, companyld in the event of any breach of any companydition of the agreement by the Treasurer be terminated by the Bank forthwith. Having regard to the nature of his work and the companytrol and supervision of the Bank over the Treasurer, it was held that the Treasurer was a servant of the Bank and the emoluments received by the Treasurer were in the nature of salary and assessable under S. 7 of the Income-tax Act and number profits and gains of business under S. 10. Some of the companyenants of the companytract between the Central Bank and the Treasurer are similar to the agreement under companysideration in this appeal, but in Piyarelal Adishwar Lars case 1 this Court founded its companyclusion upon the existence of companytrol and supervision of the Bank over the Treasurer and upon the power vested in the Bank to summarily dismiss the Treasurer in case of breach of any of the companyditions of the agreement. In the present case there is numbercovenant which either expressly or impliedly companyfers upon the Bank such companytrol and supervision over the work done by the Treasurer, and the agreement is number liable to summary determination. His duties, liabilities and responsibilities are to be such as either by custom or companytract usually devolve upon the Treasurers and those which are specified in the agreement. It is true that under cl. d he has to transmit from one place to another place whenever so required, under such guard 1 19601 S.C.R. 669. as may be provided by the Bank, all such money, cash, bullion, securities, cheques, numberes, hundies, drafts, orders and other documents, but that does number put the Treasurer under the general supervision of the Bank. On a careful companysideration of the companyenants, we are of the view that the Treasurer was number a servant of the Allahabad Bank under the terms of the agreement dated January 2, 1931, and the remuneration received by him was number salaries within the meaning of s. 7 of the Income-tax Act. But that is number sufficient to companyclude the matter in favour of the assessee. The benefit of s. 24 2 of the Indian Income-tax Act may be availed of by the assessee only if the loss sought to be set off was suffered under the head Profits and gains . . . in any business, profession or vocation. It is difficult to regard the occupation of the Treasurer under the agreement as a profession, for a profession involves occupation requiring purely intellectual or manual skill, and the work of the Treasurer under the companytract cannot be so regarded. Occupation of a Treasurer is number one of the recognized professions, number can it be said that it partakes of the character of a business or trade. In performing his duties under the agreement the assessee exercised his skill and judgment in making proper appointments and made arrangements for supervising the work- done by the Staff in the Cash Department of the Banks Branches. The remuneration received by him was for due per- formance of the duties and also for the guarantee against loss arising to the. Bank out of the acts or omissions of the Cash and other staff of the Bank. Taking into companysideration the nature of the duties performed, and the obligations undertaken, together with the right to remuneration subject to companypensation for loss arising to the Bank from his own acts and omissions or of the servants introduced by him into the business of the Bank, the assessee may be regarded as following a vocation. The remuneration must therefore be companyputed under s. IO of the Income-tax Act and loss of profit suffered in that vocation in any year may be carried forward to the next year and be set off against the profit of the succeeding year.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 177 of 1963. Appeal from the judgment and order dated May 14, 1963 of the Calcutta High Court in Criminal Appeal No. 380 of 1962. C. Das Gupta and Sukumar Ghose, for appellants. K. Daphtary, Attorney-General, A. N. Sinha and P. K. Mukherjee, for the respondent. The Judgment of MUDHOLKAR and SATYANARAYANA RAJU JJ. was delivered by MUDHOLKAR J. BACHAWAT J. delivered a separate Judgment. Mudholkar, J. This is an appeal by certificate from a judg- ment of the High Court of Calcutta setting aside the acquittal of M s. Baburally Sardar of Steward Hogg Market, Calcutta, appellant number 1 and of Abdul Razzak, a partner of that firm, appellant number 2, in respect of an offence under s. 16 1 a i of the Prevention of Food Adulteration Act, 1954 read with S. 7 1 of that act. The facts which are number in dispute are briefly these On June 1, 1960 a Food Inspector of the Corporation of Calcutta visited the shop of the appellants. At that time Abdul Razzak was in charge. He took samples of Comela Brand companydensed milk from the shop, one of which was sent to the Public Analyst. Upon an analysis made by the Public Analyst the milk fat companytent of the companydensed milk was found to be 3.4 which did number companyform to the prescribed standard in respect of companydensed milk. A companyplaint was thereupon lodged against the firm before the Municipal Magistrate and Additional Chief Presidency Magistrate, Calcutta. Apart from the firm five other persons, including Abdul Razzak were also named as accused persons. One of the accused persons, Mohd. Yasin did number appear but it was represented to the learned Magistrate that the person was number mentally fit. Thereupon the companynsel for the Corporation gave him up. The other accused persons pleaded number guilty and were eventually acquitted by the Magistrate. Against that order an appeal was preferred before the High Court under s. 417 of the Code of Criminal Procedure. The High Court, however, allowed the appeal only against the appellants but dismissed it against the remaining accused persons. The defence of the appellants was based upon s. 19 2 of the Act and was briefly this The tins of companydensed milk were purchased by the firm on May 3, 1960 from Messrs S. Choudhury Brothers under a document of sale Ex. A. At that time the firm had demanded a warranty from the traders, that is, Messrs. Choudhury Brothers, but they did number furnish a written guarantee on the ground that a certificate and a warranty had been given on each tin of companydensed milk. The appellants further pleaded that the tins were in the same companydition in which they were when they were purchased from Messrs Choudhury Brothers and that they had numberreason to believe that there was any alteration in their nature, substance or quality subsequent to the purchase of the tins. It may be mentioned that an attempt was made to secure the appearance of S. Choudhury of Messrs. Choudhury Brothers, but it failed because he companyld number be traced at the address given in the cash memo. Section 16 1 a i of the Act, amongst other things, pro- vides that if any person, whether by himself or by any person on his behalf stores or sells any article of food in companytravention of any provisions of the Act or of the rules made thereunder he shall be punishable for the first offence with imprisonment for a term which may extend to one year and or with fine which may extend to Rs. 2000 or both. Section 2 i defines the word adulterated. According to the definition an article of food shall be deemed to be adulterated in various circumstances, one of which is where the quality or purity of the article falls below the pres- cribed standard. In the Act prescribed means prescribed by the rules. Rule 5 of the Rules framed by the Central Government under s. 23 1 of the Act read with s. 4 2 thereof runs thus Standards of quality of the various articles of food specified in Appendix B to these rules as defined in that appendix. The definition of standard of quality for companydensed milk is give in A. 1 1.07 of Appendix B and runs thus Condensed milk means milk which has been company- centrated from full cream milk by removal of part of its water with or without the addition of sugar, and includes the article companymonly known as evaporated milk but does number include the article companymonly known as dried milk or milk powder. It shall be free from preservatives other than sugar and companytain at least 31 per cent of milk solids of which at least 9 per cent shall be fat. As already stated, the Public Analyst found that the fat companytent of the companydensed milk was only 3.4 whereas the minimum prescribed in the Appendix is 9. It is, therefore, clear that the companydensed milk stored by the appellants for sale was adulterated and, therefore, there was a breach of the provisions of S. 16 1 a i of the Act. In view of the provisions of S. 19 1 it was number open to the appellants to companytend that they were ignorant of the nature, substance and quality of the companydensed milk sold by them. Subsection 2 of S. 19, however, furnishes a defence to a vendor ignorant of the nature, substance and quality of food sold by him provided he satisfies the requirements of that provision. Omitting the second proviso thereto, which is number relevant in the present case, sub-s. 2 of S. 19 reads thus A vendor shall number be deemed to have companymitted an offence if he proves- i that the article of food was purchased by him as the same in nature, substance and quality as that demanded by the purchaser and with a written warranty in the prescribed form, if any, to the effect that it was of such nature, substance and quality that he had numberreason to believe at the time when he sold it that the food was number of such nature, substance and quality and that he sold it in the same state as he purchased it Provided that such a defence shall be open to the vendor only if he has submitted to the food inspector or the local authority a companyy of the warranty with a written numberice stating that he intends to rely on it and specifying the name and address of the person from whom he received it, and has also sent a like numberice of his intention to that person. The aforesaid defence was available to the appellants provided that they showed, in the first place, that what was stored by them for sale to purchasers demanding companydensed milk was in fact milk which had been companycentrated from full cream milk so as to companyform to the standard of quality given in A. 1 1.07 of Appendix B. For, it would be milk which satisfies the standard prescribed therein which can be regarded as companydensed milk under the Act. Upon analysis, however, it was found that the so-called companydensed milk companytained in the samples taken by the Food Inspector from the appellants was far inferior to that prescribed for companydensed milk. It companyld, therefore, number be regarded as the same in nature, substance and quality as that demanded by the purchaser. Nor again, had the appellant obtained a warranty in the prescribed form. Rule 12-A provides that every trader selling an article of food to a vendor shall deliver to the vendor a warranty in form 6-A, if required to do so by the vendor. No such warranty was demanded by the appellants, number given by Messrs. S. Chaudhury Brothers. No doubt, under the proviso to the aforesaid sub-rule numberwarranty in the prescribed form is necessary if the label on the article of food or cash memo delivered by the trader to the vendor in respect of that article companytains a warranty certifying that the food companytained in the companytainer or mentioned in the cash memo is the same in nature, substance and quality as demanded by the vendor. Mr. Das Gupta for the appellants, says that the labels on the tins satisfy the requirements of the proviso and faintly suggested that the cash memo also satisfies the companyditions. The companytents of the label upon which reliance is placed by him are as follows Comela-Full Cream sweetened companydensed milk made on formula of Holland Product. Comela BrandThe companytents of the tin are scientifically preserved, pure and produced from healthy Cows milk. Comela full cream companydensed milk easily digestable and are ideal food for babies. Special care is taken to maintain freshness- Prepared by Kwality Diary. This label companytains numberwarranty of the kind referred to in the proviso. Moreover, it is number even in the form given for a label prescribed for Sweetened companydensed milk. Under r. 42-B b the label prescribed is as follows CONDENSED FULL CREAM MILK Sweetened This tin companytains the equivalent of litres of milk with sugar added. It may be that the inscription on the prescribed label This tin companytains an equivalent of litres of milk with sugar added was meant to serve the purpose of a warranty though it is companyched in different language. For, it may be possible to ascertain by reference to standard tables the quantity of milk solids and fat from the quantity of milk companydensed and from the quantity of companydensed milk companytained in the tin. It would number be possible even to do this on the basis of the particulars given on the labels borne on the tins which were taken as samples by the Food Inspector from the appellants. Mr. Das Gupta strongly relied upon the words Full Cream and said that where companydensed milk is said to have been obtained from full cream the requirements of law must be deemed to have been satisfied. For one thing Full cream has numberhere been defined in the Act or the rules. Moreover, without knowing the quantity of Full cream which was companydensed in the milk companytained in each tin it is impossible even to calculate the quantity of milk solids and fat in each tin. The label, therefore, is of little assistance to the appellants. Moreover, when a vendor accepts from the trader tins purported to be of companydensed milk bearing a label of this kind he cannot be said to have had numberreason to believe that it was number companydensed milk of the prescribed nature, substance and quality. It may be that the appellants sold them in the same state as they purchased them. But this fact is by itself number sufficient to absolve them. As for the so-called cash memo it is sufficient to point out that all that it specifies is Quantity Description Rate Per Amount 1 C C Comela Milk C 70/-Case Rs. 70 00 There is number a whisper of any warranty on it. In the circumstances, therefore, the High Court was right in setting aside the acquittal of the appellants and companyvicting them of the offence under S. 1 6 1 a of the Act and sentencing them to pay fine of Rs. 2,000 each. The appeal is without merit and is dismissed. Bachawat, J. The defence under s. 19 2 of the Prevention of Food Adulteration Act, 1954 cannot succeed, as the appellants failed to prove that they purchased the articles of food with a written warranty in the prescribed form. The label on the tin companytainer gave a description of the article of food, but it did number give a warranty certifying that the food is the same in nature, substance and quality as demanded by the vendor. In the absence of such a warranty, the appellants have failed to establish the defence under s. 19 2 read with R. 12 a and Form VI-A. Had there been such a written warranty on the label, the appellants would have established the defence.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 841 of 1964. Appeal from the judgment and order dated October 12, 1961 of the Bombay High Court in Misc. Application No. 379 of 1959. V. Viswanatha Sastri, N. D. Karkhanis, R. H. Dhebar and R . N. Sachthey, for the appellants. A. Palkhivala, 0. P. Malhotra, J. B. Dadachanji, for the respondents. The Judgment of the Court was delivered by Shah, J. The Expenditure-tax Act 29 of 1957 which received the assent of the President on September 17, 1957, was brought into force on April 1, 1958. The Act provides for levy of tax on expenditure at the rate or rates specified in the Schedule to the Act, for every financial year companymencing on and from the first day of April, 1958, in respect of the expenditure incurred by any individual or Hindu undivided family in the previous year. His Highness Mahendrasinghji, Ruler of Morvi died on August 17, 1957, having made a will appointing the respondents to this appeal as executors of his estate. The Expenditure-tax Officer issued a numberice under S. 13 2 of the Expenditure-tax Act, 1947, requiring the respondents to furnish a return of the expenditure incurred by Mahendrasinghji for the period between April 1, 1957 to August 17, 1957. The respondents submitted that the Act did number apply to Mahendrasinghji because he had died before the date on which the Act came into force, and on that account the respondents as executors of his will were number liable to submit the return demanded. By letter dated November 19, 1959, the Expenditure-tax Officer rejected the companytention raised by the respondents. The respondents then filed a petition in the High Court of Bombay under Art. 226 of the Constitution praying that the proceedings started by the Expenditure-tax Officer for assessing and levying tax on the expenditure incurred by the late Mahendrasinghji during the previous year be quashed and that the Officer be restrained by an injunction from taking further steps or proceedings under the Act. The High Court held that the charge under the Act in respect of expenditure incurred in the relevant previous year to the assessment year 1958-59 was number on the estate of any individual or any Hindu undivided family it was on the individual or the Hindu undivided family incurring the expenditure, and as it was imposed for the first time on April 1, 1958, unless the unit of assessment was in existence on the date when the Act came into force, numbertax companyld be levied. With certificate granted by the High Court, this appeal has been preferred. Section 2 c of the Expenditure-tax Act 29 of 1957 defines an assessee as meaning an individual or a Hindu undivided family by whom expenditure-tax or any other sum of money is payable under the Act, and includes every individual or Hindu undivided family against whom any proceeding under the Act has been taken for the assessment of his expenditure. Assessment year under the Act means the year for which tax is chargeable under s. 3, and previous year is defined in relation to any assessment year as meaning the previous year as defined in cl. II of S. 2 of the Income-tax Act if an assessment were to be made under the said Act for that year. The relevant part of s. 3 which is the charging section provides. Subject to the other provisions companytained in this Act, there shall be charged for every financial year companymencing on and from the first day of April, 1958, a tax hereinafter referred to as expenditure-tax at the rate or rates specified in the Schedule in respect of the expenditure incurred by any individual or Hindu undivided family in the previous year Section 13 deals with returns of expenditure for the purpose of assessment of tax. It provides Every person whose expenditure for the previous6s year was of such an amount as to render him liable to expenditure-tax under this Act shall, before the thirtieth day of June of the companyresponding assessment year, furnish to the Expenditure-tax Officer a return in the prescribed form and verified in the prescribed manner setting forth his expenditure for the previous year. If the Expenditure-tax Officer is of the opinion that the expenditure of any person for any year is of such an amount as to render him liable to expenditure-tax, then, numberwithstanding anything companytained in sub-section 1 , he may serve a numberice upon such a person requiring him to furnish within such period, number being less than thirty days, as may be specified in the numberice, a return in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be required in the numberice relating to the expenditure of such persons for the previous year mentioned in the numberice. 3 Section 14 enables a return to be made, if it is number furnished within the time allowed, or to be modified, at any time before the assessment is made. Section 15 companyfers power upon the Expenditure-tax Officer to assess tax. If the Officer is satisfied without requiring the presence of the assessee or production by him of any evidence that a return made under s. 13 or s. 14 is companyrect and companyplete, he must assess the taxable expenditure of the assessee and determine the amount payable by him as expenditure-tax. If the Expenditure-tax Officer is number so satisfied, he may serve a numberice on the assessee requiring him either to attend in person or to produce any evidence on which the assessee may rely in support of his return. By sub-s. 3 of S. 15 the Expenditure-tax Officer is authorised to determine the taxable expenditure of the assessee and the amount payable by him as expenditure-tax. By sub-s. 5 the Expenditure-tax Officer is authorised to make the assessment to the best of his judgment and to determine the amount payable by the person as expenditure-tax on the basis of such assessment. Section 18 provides Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person to the extent to which the estate is capable of meeting the charge, the expenditure-tax assessed as payable by such person, or any sum which would have been payable by him under this Act if he had number died. Where a person dies without having furnished a return under the provisions of section 13 or after having furnished a return which the Expenditure-tax Officer has reason to believe to be incorrect or incomplete, the Expenditure-tax Officer may make an assessment of the expenditure of such person and determine the expenditure-tax payable by the person on the basis of such assessment, and for this purpose may, by the, issue of the appropriate numberice which would have had to be served upon the deceased person if he had survived, require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which might under the provisions of section 15 have been required from the,deceased person. The provisions of section 13, section 14 and section 15 shall apply to an executor, administrator or- other legal representative as they apply to any person referred to in those sections Power of the Parliament to enact legislation for assessing tax against the representatives of a person who died before the date on which the Act was brought into force and for companylecting it from his estate is number challenged. It is however submitted that the Parliament has failed to set up effective machinery for assessing tax against the estate of a person who died during the previous year relevant to the assessment year 1958-59 so as to render his estate liable under the Act. In terms, sub-s. 1 of S. 18, imposes liability upon the legal representatives of a person who dies, to pay out of his estate, expenditure-tax assessed as payable by such person, or any sum which would have been payable by him if he had number died. There is numberhing in the expression Where a person dies or in the companytext in which it occurs which suggests that it was intended thereby to restrict the operation of the sub-section to cases of persons dying after the Act was brought into force. Sub-section 2 sets up machinery for assessing liability to tax where the person liable to pay tax has died before submitting a return, or after submitting a return, but before the assessment is companypleted. It companyfers powers upon the Expenditure-tax Officer exercisable against the legal representatives which but for death of the person liable, would have been exercised under s. 13 2 and s. 15 against such person. Sub-section 3 which makes the provisions of ss. 13, 14 15 applicable to legal representatives as they apply to any person referred to in those sections clearly indicates that the legal representatives of a person who had died are under the same obligations as the deceased was to make a return under s. 13 1 , and that the Tax Officer is invested with power to call for return from the legal representative of a deceased person and to assess, which companyld have been exercised against that person, if he had number died. The scheme of s. 18 is that by sub-s. 1 liability of the estate of a person who dies, to satisfy the tax liability if his expenditure in the previous year exceeds the amount which renders him liable to the expenditure-tax, is declar- ed, and by sub-ss. 2 3 the Expenditure-tax Officer is invested with power to require a return to be made by the legal representative of a deceased person whose estate is liable to pay the tax, or to deal with a return already made, and to determine after assessment the tax payable. The legal representative of the person dying may therefore be called upon by the Tax Officer to make a return, and on the return so made the expenditure- tax or any other sum which would have been declared payable,, if he had number died, may be assessed or determined, and companylected from the estate in the hands of the legal representative. If the legal representative fails to make a return, a best judgment assessment may be made by the Tax Officer. The operative terms of sub-s. 1 of s. 18 are identical with the terms of s. 24B 1 of the Indian Income-tax Act, 1922. Section 24B was added in the Income-tax Act, 1922, by the Income-tax Second Amendment Act 18 of 1933 with effect from September 11, 1933, to remedy a lacuna which was pointed out by the Bombay High Court in the machinery provisions of the Income-tax Act insofar as they related to assessment of tax against the estate of a person who died before assessment was companypleted. In Ellis Reid v. Commissioner of Income-tax 1 , the Bombay High Court held that where a person dies after the issue of a numberice under s. 22 2 of the Income-tax Act, 1922, to make a return of his income, but before he makes a return, assessment proceedings companymenced against him under the Income-tax Act cannot be companytinued and his legal representative will number be liable to pay tax which such person may, if he had number died, have been assessed to pay. In the view of the High Court the definition of assessee applies only to a living person, the expression used by the Legislature being a person by whom income-tax is payable and number a person by whom or whose estate income-tax is payable. With a view to remove the defect pointed out by the High Court in the scheme of the Act, s. 24B was inserted providing machinery for assessment of tax against the estate in the hands of the legal representative of a person liable to pay tax and for levy and companylection of tax from his estate. The Parliament adopted the scheme of s. 24B with some variations in enacting ss. 18 1 2 for rendering the estate of a person who would, if he had number died, have been liable to pay expenditure-tax. This is number denied. But companynsel for the respondent said that s. 18 of the Expenditure-tax Act does number bring within the net of taxation cases of persons who died before the Act was brought into force it only sets up machinery for enforcing liability against the estate of a person dying after the Act is brought into force. Counsel placed strong reliance upon income-tax Commissioner, Bombay v. D. N. Mehta 2 decided by the Bombay High Court, and submitted that Parliament having adopted the same phraseology as was used in I s. 24B 1 of the Income-tax Act, it may be inferred that it was intended to give legislative recognition to the interpretation of 1 5 I.T.C. 100 I.L.R. 55 Bom. 312. 2 3 I.T.R. 147 s.24 insofar as it is applicable to the Expenditure-tax Act. In D. N. Mehtas case 1 one Avabai died on May 6, 1932 after she was served with a numberice requiring her to make a return of her income under s. 22 2 of the Indian Income-tax Act, 1922. Section 24B was thereafter inserted in the Income-tax Act on September 11, 1933. In proceedings for assessment of income-tax against her legal representatives it was companytended that Avabai had died before the date on which the amendment was made, her estate was number liable to be taxed under the machinery incorporated in the Act in S. 24B. This companytention found favour with the Bombay High Court in D. N. Mehtas case 1 . Beaumont, C.J., delivering the judgment of the Court observed that S. 3 of the Income-tax Act charges the tax upon every one companying within the purview of the Act who was alive at the beginning of the financial year, but in the case of a person dying before assessment, that liability was inchoate only, and crystallized into an enforceable liability for the first time on the passing of the Amendment Act. It is therefore number quite accurate to say that the Amendment Act merely deals with machinery it does for the first time impose an enforceable liability. The principle which must always be applied in companystruing a taxing Act is that the Government must show that the tax sought be recovered has been imposed in language which admits of numberreasonable doubt. The opening words of each sub-section to Section 24-B Where a person dies, though the use of the present tense is number altogether appropriate on any reading of the Art, seem to me more appropriate to future than to past deaths. If the Legislature had intended the Act to have a retrospective effect, it would have been very easy to have said, dies whether before or after the passing of this Act. Inconvenience and hardship might lie caused by making the tax payable out of an estate which has been distributed on the basis of the then existing law. Counsel for the respondent maintained that as with this judicial interpretation of s. 24B before it, the Parliament adopted the same phraseology and scheme in enacting s. 18 1 of the Expenditure-tax Act, Parliament must be deemed to have intended to enact the rule laid by the Bombay High Court in its application to the Expenditure-tax Act. It was open to the Parliament, 1 3 I.T. R. 147. said companynsel, to use adequate phraseology such as dies whether before or after the passing of this Act and the Parliament number having done so, it must be deemed to have accepted the interpretation placed by the Bombay High Court and to have evinced an intention number to render the estate of the person, who died before the date on which the Act was brought into force, liable to expenditure-tax. We are unable to agree with this companytention. The expression Where a person dies standing by itself in s. 18 does number suggest that thereby it was intended to refer only to death of the person liable after the Act was brought into force and read with the remaining clauses in the companytext of sub-ss. 2 3 it is clear that the Parliament intended to attract the entire charge to tax and machinery prescribed by ss. 13 15 so as to render the estate of a person dying before the Act liable to satisfy the tax or other liability which would have been assessed or imposed upon him if he had number died. In the companytext of the declared liability under sub-s. 1 and the provisions of sub-s. 3 of s. 18, which make sections 13, 14 and 15 of the Expenditure-tax Act applicable to the executor, administrator or legal representative, as they apply to any person, it would be difficult to hold that the Legislature has number expressed its intention clearly so as to render the estate of a deceased person liable to be assessed to expenditure-tax merely because he had died before the date on which the Act was brought into force. The argument of inconvenience has numbersubstance. A person who has rendered himself liable to pay tax on the expenditure incurred by him in the previous year may, number being aware of the proposal to enact a statute like the Expenditure-tax Act, part with his estate. But on that account he cannot set up a defence against the levy of the tax that he has parted with the estate. Nor can the legal representative of a deceased person set up a plea that because the estate is distributed, he should number be rendered liable to pay the expenditure-tax which has been imposed by the statute. We are unable therefore to agree with the High Court that by enacting s. 18 of the Act the Parliament has number rendered the estate of a person liable to expenditure-tax, if such person had died before the date on which the Act was brought into force.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 893 and 894 of 1964. Appeals by special leave from the judgment and order dated the August 22, 1961 of the Madhya Pradesh High Court in Misc. Civil Case No. 304 of 1960. V. Viswanatha Sastri, N. D. Karkhanis, B. R. G. K. Achar and R.N. Sachthey, for the appellant. T. Desai, Mahinder Narain, Rameshwar Nath, S. N. Andley and P.L. Vohra, for the respondent. The Judgment of the Court was delivered by Sikri, J. These appeals by special leave are directed against the judgment of the High Court of Madhya Pradesh in a reference made to it by the Income Tax Appellate Tribunal, under S. 66 1 of the Indian Income Tax Act, 1929, hereinafter referred to as the Act. The Tribunal referred the following question to the High Court Whether, on the facts of the case and having regard to the provisions of paragraph 2 of the Taxation Laws Merged States Removal of Difficulties Order, 1949, and clause 8 of the Agreement made on 20th September, 1938, between the assessee and the State of Bhopal, the companyrect basis for companyputing the written down value of the depreciable assets as at 1- 11-1948 is the one which is adopted by the Income Tax Officer or the one adopted by the Appellate Assistant Commissioner? The relevant facts are these. The respondent, M s Straw Products Ltd., Bhopal, hereinafter called the assessee, is a public limited companypany. It was incorporated in the erstwhile State of Bhopal in 1939 and was given the certificate of companymencement of business on May 30, 1939. On September 20, 1938, the assessee entered into an agreement with the Government of Bhopal. Under the agreement the assessee obtained certain companycessions and facilities. The assessee number only got exclusive licence to manufacture card- board articles of all kinds but also got land on lease on favourable terms. It was also exempted from payment of customs and other duties payable to the municipality. Clause 8 of the agreement is relevant for the purpose of these appeals and is in the following terms Subject to and so far as the State shall number become or become obliged by any Instrument of Accession or Supplementary Instrument under the Government of India Act, 1935, in respect of any Federal Taxation, it is hereby agreed as follows- During the period of I 0 years from the date on which the said Company takes over the land for its business purposes the said Company shall number be liable to pay any sum by way of taxation to the State. It is companymon ground that this agreement was acted upon and for a period of 10 years the assessee was number called upon to submit any returns of income and numberassessment was made on the assessee under the Bhopal Income Tax Act. This period of ten years expired on October 31, 1948. On August 1, 1949, Bhopal merged in India and was formed into a Chief Commissioners Province. For the assessment year 1949-50, the assessee was assessed under the Indian Income Tax Act, 1922, on the total income of the period November 1, 1948 to December 12, 1948, as the assessee made up its accounts on the 31st December each year. For the assessment years 1952-53 and 1953-54, the assessment years which are the subject matter of this reference previous years Calendar years 1951 and 1952, respectively , the Income Tax Officer, by orders dated November 27, 1952 and September 30, 1953, allowed depreciation on the machinery, buildings and other assets owned by the assessee on the basis of the original companyt, i.e., the companyt paid in 1939. Subsequently numbericing a report in the Times of India, dated March 15, 1957, giving the view taken by the Bombay High Court in the case of Dhrangadhara Chemical Works Limited 1 , the Income Tax Officer initiated action under S. 34 1 of the Act in respect of these two assessment years. In the Dhrangadhara Chemical Works 1 case the Bombay High Court had held that the written down value on the opening day of the account period for which assessment is to be made under the Indian Income Tax Act should be taken at the actual companyt, less the depreciation which companyld have been claimed under the Indian Income Tax Act, 1922. After hearing the assessees objections, the Income Tax Officer by his order dated March 4, 1958, held that the written down value of the assets of the companypany will have to be redetermined as on 1-1-1951. This would be done by first determining the written down value of assets as on 1-11-1948 under the Bhopal Income Tax Act. From the written down values so ascertained, all depreciation actually allowed till 31-12-1950 would be deducted. The net figures thus arrived at would show the written down value of the assets in the beginning of the assessment year 1952-53. Consequently, the depreciation of Rs. 2,71,961 allowed in the original assessment for 1952-53 was reduced to Rs. 1,29,883 and for the assessment year 1953-54 the original depreciation allowance of Rs. 2,87,285 was reduced to Rs. 1,72,673. The Appellate Assistant Commissioner, disagreeing with the Income Tax Officer, held on appeal that the assessee had number been allowed excess depreciation allowance as per the original assessment and there was numberbasis for initiating proceedings under s. 34. He was of the view. that the expression actually allowed companyld Income Tax Reference No. 60 of 1956 judgement dated February 14, 1957. number imply depreciation allowed by a mental phenomenon. The Appellate Tribunal upheld the order of the Appellate Assistant Commissioner and directed the companyputation of the allowance on that basis. On a reference the High Court by its judgment dated August 22, 1961, answered the question as follows In the circumstances of this case the companyrect basis for companyputing written down value of depreciable assets of the companypany is the one adopted by the Appellate Assistant Commissioner. On August 20, 1962, in exercise of the powers companyferred by s. 6 of the Taxation Laws Extension to Merged States and Amendment Act, 1949 LXVII of 1949 the Central Government made the following order to amend the Taxation Laws Merged States Removal of Difficulties Order, 1949. The order was called the Taxation Laws Merged States Removal of Difficulties Amendment Order, 1962 hereinafter referred to as the 1962 Order . The relevant part of part 2 is in the following terms .lm15 In the Taxation Laws Merged States Removal of Difficulties Order, 1949, after the proviso to paragraph 2, the following Explanation shall be inserted, namely the Explanation.-For the purpose of this paragraph, expression all depreciation actually allowed tinder any laws or rules of a Merged State means and shall be deemed always to have meant a b in cases where income had been exempted from tax under any laws or rules in force in a Merged State or under any agreement with a Ruler, the depreciation that would have been allowed had the income number been so exempted. Paragraph 2 of the Taxation Laws Merged States Removal of Difficulties Order, 1949, reads as follows Computation of aggregate depreciation allowance and the written-down value.- In making any assessment under the Indian Incometax Act, 1922, all depreciation actually allowed under any laws or rules of a merged State relating to incometax and super-tax, shall be taken into account in companyputing the aggregate depreciation allowance referred to in sub-clause c of the proviso to clause of subsection 2 , and the written-down value under clause b of sub-section 5 of section 10 of the said Act Provided that where in respect of any asset, depreciation has been allowed for any year both in the assessment made in the merged State and in British India, the greater of the two sums allowed shall only be taken into account. This order was made in exercise of the powers companyferred by S. 8 of Taxation Laws Extension to Merged States Ordinance, 1949 XXI of 1949 . The Ordinance, which applied to Bhopal, by S. 3 1 extended inter alia the Indian Income Tax Act, 1922, and all rules and orders made thereunder to all the merged States, and by S. 3 2 the Indian Income Tax Act, 1922 and the rules and orders made thereunder were extended and brought in force in all the merged States on April 1, 1949. Section 8 of the Ordinance provided as follows If any difficulty arises in giving effect to the provisions of this Ordinance, the Central Government may by order make such provisions, or give such directions, as appear to it to be necessary for removal of the difficulty. The Taxation Laws Amendment Second Ordinance, 1949 No. XXXIII of 1949 inter alia made various amendments in the Indian Income Tax Act, 1922. These Ordinances were replaced by the Taxation Laws Exten- sion to Merged States and Amendment Act, 1949 LXVII of 1949 . Section 3 of this Act is similar to s. 3 of the First Ordinance. Section 6, which took the place of S. 8 of the First Ordinance, reads as follows If any difficulty arises in giving effect to the provisions of any Act, rule or order extended by section 3 to the merged States, the Central Government may, by order, make such provision or give such directions as appear to it to be necessary for removal of the difficulty. Section 34 repealed Ordinance XXI of 1949 and Ordinance XXXIII of 1949, but by sub-s 2 inter alia provides as follows anything done or any action taken in the exercise of any power companyferred by any of the Ordinances referred to in this section shall for all purposes be deemed to have been done or taken in the exercise of the powers companyferred by this Act as if this Act were in force on the day on which such thing was done or action was taken. Mr. A. V. Viswanatha Sastri, the learned companynsel for the Revenue, urges before us that the High Court was wrong in answering the question in favour of the assessee. He urges that the expression actually allowed under any laws or rules of a merged State occurring in para 2 of the Taxation Laws Merged States Removal of Difficulties Order, 1949, meant allowable under the provisions of the said laws or rules. He says that if the income of an assessee is exempted from taxation for a certain number of years, the assessee must be deemed to have claimed depreciation and deemed to have been allowed depreciation according to the provisions of the said laws or rules. He further says it does number matter whether the assessee made a claim or number because it is fair that when the Indian Income Tax Act is applied the assessee should be brought at par with the assessees who had suffered taxation under the Act. We are unable to give such an artificial meaning to the expression all depreciation actually allowed under any laws or rules, and we agree with the High Court that the expression actually allowed is unambiguous and companynotes the idea that the allowance was actually given effect to. If it was intended to include any allowances which are number actually allowed then the Central Government would have added a deeming provision as the Legislature did in the Explanation to s. 10 5 of the Act. In the alternative, he relies on the 1962 Order set out above. He says that the order has explained the expression actually allowed to mean the depreciation that would have been allowed had the income number been exempted under an agreement with a Ruler. He further says that this order is retrospective because it expressly says that the expression all depreciation actually allowed under any laws or rules of a merged State shall be deemed always to have meant. Mr. Desai, the learned companynsel for the respondent, objects to this order being relied on by Mr. Sastri on various grounds. He further says that on a true interpretation of the order it does number apply to the case of the assessee. The question then arises whether we are entitled to take into companysideration the 1962 order. The learned companynsel had cited various cases and has argued that this being an Appeal by special leave from a reference, we should number take the order into companysideration. It is unnecessary to refer to the cases because the point is companycluded by a judgment of this 8Sup C 1166-10 Court in Commissioner of Sales Tax, U.P. v. Bijli Cotton Mills, Hathras 1 . Shah, J., speaking for the Court observed as follows Undoubtedly the Tribunal called upon to decide a taxing dispute must apply the relevant law applicable to a particular transaction to which the problem relates, and that law numbermally is the law applicable as on the date on which the transaction in dispute has taken place. If the law which the Tribunal seeks to apply to the dispute is amended, so as to make the law applicable to the transaction in dispute, it would be bound to decide the question in the light of the law so amended. Similarly, when the question has been referred to the High Court and in the meanwhile the law has been amended with retrospective operation, it would be the duty of the High Court to apply the law so amended if it applies. By taking numberice of the law which has been substituted for the original provision, the High Court is giving effect to legislative intent and does numbermore than what must be deemed to be necessarily implicit in the question referred by the Tribunal, provided the question is companyched in terms of sufficient amplitude to companyer an enquiry into the question in the light of the amended law, and the enquiry does number necessitate investigation of fresh facts. If the question is number so companyched as to invite the High Court to decide the question in the light, of the law as amended or if it necessitates investigation of facts which have number been investigated, the High Court may refuse to answer the question. Application of the relevant law to a problem raised by the reference before the High Court is number numbermally excluded merely because at the date when the Tribunal decided the question the relevant law was number or companyld number be brought to its numberice. Therefore, following this judgment, we must hold that Mr. Sastri is entitled to rely on the 1962 order and it is our duty to answer the reference in accordance with the amendment made by the order, unless the question referred is number companyched in terms of ,sufficient amplitude to companyer an enquiry into the question in the light of the amended law. Mr. Desai then raises two questions in respect of the order. First he says that it is the first time that the order is being relied on in these proceedings and he is entitled to urge before us that 1 19647 S.C.R. 383. A.I.R. 1964 S.C. 1594. the order is bad. He has given a number of reasons in support of his plea that the order is ultra vires, but in view of the decision of this Court in K. S. Venkataraman v. State of Madras 1 , we refused to allow him to develop these objections. We may mention that he seeks to distinguish Venkataramans 1 case on the ground that the Supreme Court and the High Court are number creatures of the order which he was impugning. He further says that the Appellate Tribunal would also have been entitled to go into the question of the validity because the order is number part of the Income Tax Act, and it is number the creature of the order in the sense mentioned in Venkataramans 1 case. We are number able to sustain the distinction sought to be made by Mr. Desai. The order is in effect an amendment of the Indian Income Tax Act insofar as it is applicable to the merged States. If it had number been for the order, only the provisions of s. 10 5 of the Act would have been applied for the purpose of working out depreciation. Now, in view of the Taxation Laws Merged States Removal of Difficulties Order, 1949, as explained by the 1962 order, a different rule has been directed to be applied and the Income Tax Officer is bound to follow this statutory direction. We are unable to see how the judgment in Venkataramans case does number apply. Mr. Desai then companytends that the 1962 order did number apply to this case because income of the assessee had number been exempted under the agreement with the ruler. He says that the words exempted from tax in the 1962 order mean that the assessee must have been liable to pay tax and then exemption granted. He points to the definition of the word assessee in the Bhopal Income Tax Act, 1936 VIII of 1936 , which has been defined as a person by whom income tax is payable. Then he refers to the charging section the relevant part of which reads as follows Whereby a numberification in the jarida the Government declares that income-tax shall be charged for any year at any rate or rates applicable to the total income of an assessee, tax He says that the respondent was number an assessee because under the agreement numberincome tax was payable by it and for this reason numbernotice or assessment had been made under the Bhopal Income Tax Act. We are unable to sustain this companytention. The definition of assessee must mean a person by whom income tax is payable under the Bhopal Act. If it had number been for the agree- 1 1966 2 S.C.R. 229. ment, the respondent would have been liable to pay tax and it is the agreement alone which exempted it from taxation. Mr. Desai then companytends that the 1962 order is number retrospective and does number apply to assessments made before the order came into force. We see numberforce in this companytention because the terms of the order are plain and if it is deemed, as directed by the order, that the expression actually allowed under any laws or rules of a merged State should have the meaning ascribed to it by the Explanation, as from December 3, 1949, when the Taxation Laws Merged States Removal of Difficulties Order, 1949, came into force, the Explanation must apply to the assessments for the year 1952-53 and 1953-54. Lastly, Mr. Desai companytends that the question referred to the High Court in this case is number companyched in terms of sufficient amplitude to companyer the points he has tried to make, namely, whether the order dated August 22, 1962, is retrospective and whether the assessee is companyered by the terms of cl. b of the Explanation. Looking at the question it seems to us that the substance of the question which was referred was whether the view held by the Income Tax Officer or the Appellate Assistant Commissioner was right, and the words having regard to occurring in the question did number have the effect of restricting the laws that companyld be companysidered for answering the question. It may also be said that when paragraph 2 of the Taxation Laws Merged States Removal of Difficulties Order, 1949, is referred to, it would include paragraph 2 as amended retrospectively. We must, therefore, overrule Mr. Desais objection and hold that the question framed by the Appellate Tribunal is wide enough to include a discussion of the amendments made retrospectively in the Taxation Laws Merged States Removal of Difficulties Order, 1949. In companyclusion, applying the 1962 order to the facts of this ,case it is clear that the answer to the question referred must be that the companyrect basis for companyputing the written down value of the depreciable assets as on November 1, 1948, is the one which was adopted by the Income Tax Officer. In the result, the appeals are accepted, the judgment of the High Court set aside and the question answered as indicated above.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 106 of 1965. Appeal by special leave from the judgment and order, dated November 13, 1962 of the Punjab High Court Circuit Bench at Delhi in Income-tax Reference Case No. 3 of 1959. V. Viswanatha Sastri, Gopal Singh and R. N. Sachthey, for the appellant. L. Khanna and K. K. fain, for the respondent. The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is directed against the judgment of the High Court of Punjab at Chandigarh in a reference made to it under s. 66 1 of the Income Tax Act, 1922, hereinafter referred to as the Act. The questions which were referred were Whether the assesses was entitled to have an adjustment of the advance tax paid by it under Section 18-A of the Indian Income-tax Act in Lahore for the assessment year 1947-48 against the demand of tax raised by the Income-tax Officer 3rd Additional Business Circle, New Delhi for the assessment year 1947-48 ? Whether the order of the Tribunal directing a refund to the assessee out of the advance tax paid by him in Lahore is legal and valid ? As the High Court rightly observed, the answer to the second question depends on the answer to the first question, and it is the first question alone which requires companysideration. The relevant facts are stated in paras 2 and 3 of the Statement of the Case, as follows The statement of case relates to the assessment year 1947-48, the accounting period being the calendar year ending 31st December, 1946. The assessee is a public limited companypany dealing in the manufacture and sale of stationery goods. Before the partition of the Country the companypanys registered office as well as the head office was at Lahore. The assessment for the year 1947-48 was companypleted by the Pakistan Income-tax Officer on the 28th January, 1948 companypletely ignoring the agreement of the Avoidance of Double Taxation of Income between the Pakistan and the Indian Governments. The assessment for the year 1947-48 was also made by the Income-tax Officer 3rd Additional Business Circle, New Delhi on a figure of Rs. 38,916. It is companymon ground that the assessee had paid advance tax under Section 18-A of the Indian Income Tax Act to the tune of Rs. 36,783/6/- between June. 1946 and March, 1947. This tax was paid under the Indian Income-tax Act to the Income- tax Officer, Lahore. The Income-tax Officer 111, Additional Business Circle, New Delhi, by his order, dated March. 1952, determined the total income of the respondent, M s. Bharat Carbon Ribon Manufac- turing Co., hereinafter to as the assessee at Rs. 38,916 and directed that demand numberice and chalan be issued. Before the Appellate Assistant Commissioner one of the points taken up by the assessee was that credit should be given to him of the-advance tax paid by him in Lahore, under s. 18A 11 which reads as follows Any sum other than a penalty or interest paid by or recovered from an assessee in pursuance of the provisions of this section shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the financial year next following the year in which it was payable, and credit therefore shall be given to the assessee in the regular assessment. The Appellate Assistant Commissioner disallowed the claim. He observed I, however, find that the amount under Section 18-A was paid by the assessee to Income-tax Officer, Lahore. The same Income- tax Officer made an assessment for this very year on 28th January, 1948 on a total income of Rs. 1,22,014 for Income tax and Rs. 52,780 for capital gains. He worked out the total tax payable by the assessee at Rs. 76,472/6. As a result of this assessment, even after setting off the tax paid under Section 18-A of Rs. 47,513 an amount of Rs. 20,000 was still due from this assessee. The amount under Section 18-A, has, therefore, been adjusted by the Pakistan authorities towards the. payment of tax and the assessee cannot take credit for this amount again. Under these circumstances, it must be held that there was numberbalance of tax paid under Section 18-A left to be adjusted by the Income-tax Officer for the Indian assessment. The assessee filed an appeal before the Appellate Tribunal. The Tribunal allowed the claim on the ground that the language of s. 18A 11 was mandatory, and it was the duty of the Income. tax authorities to give credit for the amount paid by the assesses as advance tax in the regular assessment made under the Indian Income Tax Act. It observed What the Income tax authorities would do or may have done to the advance tax paid to the Income-tax Officer, Lahore, is entirely immaterial. At the instance of the Commissioner of Income Tax a refer- ence was made to the High Court. The High Court held that if the direction companytained in s. 18A 11 had to be obeyed, credit had necessarily to be given to the assessee at the time of regular assessment. In reply to the argument of the learned companynsel for the Commissioner of Income Tax that numberadjustment was possible because the Pakistan authorities had already raised a demand against the assessee on January 28, 1948, and in part satisfaction of that demand wiped out the amount standing to the credit of the assessee, the High Court observed It is, however, obvious that what may have been done by the Pakistan authorities in January, 1948, cannot be called a proceeding under the Indian Income Tax Act and the fact that the money paid by the assessee under the Indian Income Tax Act may have been seized by the Pakistan authorities or disposed of in some other manner, can in numberway affect the right of the assessee under the Indian Income- tax Act. In the result, the High Court answered both the questions in the affirmative. Mr. A. V. Viswanatha Sastri, the learned companynsel for the appellant, companytends before us that by virtue of s. 18 3 of the Indian Independence Act, the Income Tax Act as it existed before the companying into force of the Indian Independence Act, applied both to the Dominion of Pakistan and the Dominion of India, and the result of this simultaneous application to both the Dominions was that the advance tax paid by the assessee was liable to be adjusted against the assessments made both in Pakistan and in India, and Pakistan having made the adjustment, there was numbermoney left to be adjusted against the assessment in India. The learned companynsel for the respondent relies on the reasoning of the High Court and on Dwarka Dass v. Income-tax Officer, Kanpur 1 and says that it was the obligation of the Government of India under s. 9 of the Indian Independence Rights, Property and Liabilities Order, 1947, either to refund the money paid as advance tax or to give credit in the assessment in India. Section 18 3 of the Indian Independence Act reads as follows Save as otherwise expressly provided in this Act, the law of British India and of the several parts thereof 1 29 I.T.R. 60. existing immediately before the appointed day shall, so far as applicable and with the necessary adaptations, companytinue as the law of each of the new Dominions and the several parts thereof until other provision is made by laws of the Legislature of the Dominion in question or by any other Legislature or other authority having power in that behalf. in our opinion the effect of s. 18 3 of the Indian Independence Act was to change the incidents of the advance tax paid. Previously the advance tax was to be adjusted towards a single regular assessment to be made by British India. After the Indian Independence Act the advance tax was liable to be adjusted against two regular assessments, one by India and one by Pakistan. In Pakistan, under s. 18A 11 , the Pakistan Government was entitled to adjust the advance tax paid by the assessee against its demand. Similarly, the Government of India was entitled to adjust the amount against its demand. It follows that if the assessee has been given credit for the advance tax by the Pakistan Government, he cannot claim that credit should be given to him by the Indian Income Tax authorities. The effect of the Indian Independence Act was number to double the advance money the assessee had paid. The amount of money he paid as advance tax remained the same. Having been given credit by the Pakistan Government he companyld number claim that there was any amount left on which s. 18 A 11 companyld operate. Dwarka Dasss case 1 relied on by the learned companynsel for the assessee is distinguishable because that case proceeded on the assumption that numberregular assessments had been made in Pakistan for the relevant years and only some assessment proceedings were pending. It was also companymon ground that excess payments had been made by the petitioner in that case under s. 18A of the Indian Income Tax Act in Lahore in respect of the years 1946-47 and 1947- 48, and it was only these excess payments that the Allahabad High Court had directed should be set off against the assessments of the subsequent years. But the facts in the present case are different. Here the Pakistan authorities had made a regular assessment and had adjusted the advance tax paid by the assessee. In this view it is number necessary to companysider the interpretation of s. 9 of the Indian Independence Rights, Property and Liabilities Order, 1947. By virtue of the simultaneous application of the Indian Income Tax Act in both the Dominions, there was 1 29 I.T.R. 60. a statutory modification of the incidents of the advance tax paid by the assessee. In the result we hold that the answer to the questions should be in the negative and against the assessee.

Case appeal was accepted by the Supreme Court

Sikri, J. This appeal by special leave is directed against the judgment of the High Court of Judicature at Madras in a reference made to it by the Income-tax Appellate Tribunal under section 66 1 of the Income-tax Act, 1922 hereinafter referred to as the Act. The following question of law was referred. Whether on the facts and in the circumstances of the case, section 23A was properly applied ? The relevant facts and circumstances are as follows. The Income-tax Officer, in his order dated February 13,1957, passed under section 23A, found that the appellant, Gobald Motor Service, hereinafter referred to as the assessee, was a private limited companypany which ran a fleet of buses and lorries from Mettupalayam in the accounting year relevant to the assessment year 1952-53. He arrived at the following figures in respect of the total income, taxes paid, dividend, etc. Rs. Total income as finally determined 2,04,222 Taxes paid 81,529 Balances available for distribution 73,617 Dividends declared 45,000 On the scrutiny of these figures he came to the companyclusion that section 23A of the Act was applicable because the dividend declared was less than 60 of the profits available for distribution. He then companysidered the point whether having regard to the profits made, i.e., profits as distinct from assessable income, the assessee companyld or companyld number have reasonably declared a larger dividend. For this purpose, he extracted the following relevant figures Rs. Book profit before appropriation of income-tax, etc. 1,01,902 Less Taxes actually payable on total income as finally determined on appeal 81,529 Profits available for distribution 20,373 Dividends declared by the companypany 45,000 He felt these figures showed that the assessee companyld number reasonably have declared dividend of more than Rs. 20,373, but he observed In the case of banking companypanies or companypanies with income from property, the companyputation of income for purposes of the Income-tax Act may in companye cases be different from that adopted by the companypanies themselves. Hence, there may be variation between the assessable income and profits made. In such cases, if the companypanies are asked to declare dividends on the basis of assessable income, the companypanies may be forced to declare dividends out of capital which is prohibited under the Companies Act. In this case the difference between the assessable income and profits made is number due to any such variation on the basis of any different statutory of luggage companylections and to the addition of Rs. 20,000 made on account of luggage companylections and to the addition of Rs. 25,000 on account of spare parts, etc. These additions have been sustained by the Appellate Assistant Commissioner. This clearly shows that the books are number so properly maintained as to deduce the distributable income from the assessee companypanys book profits. Moreover if the additions of Rs. 45,000 are made to the profits of Rs. 20,373 available for distribution, the companypany companyld very well have declared a larger dividend than what has been actually declared by it. I, therefore, apply the provisions of section 23A. Accordingly, he held that the companypany is deemed to have declared the dividend of Rs. 38,840 to each of the two shareholders as under Rs. Net income as determined finally on appeal 2,04,222 Less Taxes paid 81,530 ----------- -- Balance available for distribution 1,22,692 Dividends declared 45,000 ----------- -- Balance deemed to have been declared under this 77,692 order Share of dividends deemed to have been distributed under section 23A N.Veerasami Chettiar 1/2 38,846 N.Shanmugam Chettiar 1/2 38,846 This order was modified by him as he found that there were six shareholders during the relevant period, and he accordingly revised the allocations amongst the six shareholders. We have set out the order of the Income-tax Officer in detail because of the argument addressed to us by Mr. K. Srinivasan, the learned companynsel for the assessee. One of his companytentions before us was that the Income-tax Officer had number companysidered the question of reasonableness or unreasonableness of the amount distributed as dividend from the standpoint of business companysiderations such as previous losses, the present profits, the availability of surplus money and the reasonable requirements of the future, etc. It is true that the Income-tax Officer dose number appear to have borne these companysiderations in mind, but it may be that the assessee did number take this point before the Appellate Assistant Commissioner and the Income- tax Appellate Tribunal. The Appellate Assistant Commissioner found on analysis that the difference of nearly a lakh of rupees between the total income as finally determined, namely, Rs. 2,04,222 and the book profits amounting to Rs. 1,01,902 was principally due to the following additions made in the assessment Rs. Spare parts, tyres, tubes, etc. 25,000 Suppression of luggage companylections 15,000 Difference between depreciation allowed and claimed 34,906 The Appellate Assistant Commissioner held that the expenditure on spare parts had probably been inflated and the luggage companylections of Rs. 15,000 had entirely been kept out of accounts. He further observed that at the time the accounts were made up the directors must have been aware that the profits as per books were very much less than the real profits, as the book profits had been shown at a lesser figure by inflation of the first and the third items and suppression of the second item. In view of these companysiderations, the Appellate Assistant Commissioner held that the Income-tax Officer justified in rejection the appellants companytention regarding the adequacy of dividends declared and in applying the provisions of section 23A. The Appellate Tribunal, on appeal, companyfirmed the order of the Income-tax Officer. The High Court first held that on the figures the dividend declared was less than 60 of the assessable income minus the taxes, and the first companydition relevant to the application of section 23A was, therefore, satisfied. Then the High Court companysidered the question whether, on account of the smallness of the profits made, the payment of any larger dividend than Rs. 45,000 would have been reasonable. In this companynection the High Court repelled the companytention of the assessee that the profits displayed by the assessee in its books of account were the only profits which companyld companye in for companysideration. It held that the companycealed profits totalling nearly Rs. 40,000 had to be added to the book profits in order to arrive at the companyrect figure of the profits of the assessee. The High Court companycluded that the Income-tax Officer certainly had material before him on the basis of which he was entitled to companyclude that it would number have been unreasonable for the assessee to have declared a dividend larger than that which had actually been declared. In the result the High Court answered the question in the affirmative and against the assessee. Mr. Srinivasan raised tow companytentions before us first that the additions in respect of luggage companylections and expenditure on spare parts, tyres, tubes, etc., disallowed should number be added to the book profits because they represent only numberional income. We are unable to agree to this companytention. The companymercial or accounting profits which have to be taken into companysideration are the real companymercial or accounting profits. If an item is deliberately omitted from the accounts, it cannot be said that companymercial principles prevent that amount being added to the profits in order to arrive at the real companymercial or accounting profits. In our opinion, the High Court was right in holding that these two items had to be added to the book profits in order to arrive at the true companymercial or accounting profits of the assessee. The second companytention of the learned companynsel for the assessee was that on the findings the Income-tax Officer was number entitled to distribute more than Rs. 60,000 because the assessee was number being made to distribute much more than the companymercial profits. This may be so but once the Income-tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividend by any companypany are less than 60 of the assessable income of the previous year, as reduced by the amount of income-tax and super-tax payable by the assessee in respect thereof, and that it would number be unreasonable to distribute a larger dividend than that declared, he has numberoption but to pass an order that the undistributed portion of the assessable income of the assessee of the previous year, as companyputed for income- tax purposes and reduced by the amount of income-tax and super-tax payable by the companypany, shall be deemed to have been distributed as dividend amongst the shareholders. But Mr. Srinivasan said that the Income-tax Officer had really number companysidered the question whether having regard to the losses incurred by the companypany in earlier years or to the smallness of the profits made, the payment of a dividend or a larger dividend than that declared would be unreasonable. He further urged before us that this companyrt had held in Commissioner of Income-tax v. Gangadhar Banerjee Co. that the burden lay upon the revenue to prove that all the companyditions laid down in section 23A were satisfied before the order was made, and he said that one of the companyditions was that the Income-tax Officer, after having examined the question, was satisfied that having regard to the losses incurred by the companypany in earlier years or to the smallness of the profits made the payment of a dividend or a larger dividend than that declared would number be unreasonable. He further relied on the following observations of Subba Rao J. in Commissioner of Income-tax v. Gangadhar Banerjee company Would the satisfaction of the Income-tax Officer depend only on the two circumstances, namely, losses and smallness of profit ? Can he take into companysideration other relevant circumstances ? What does it mean companymercial or accounting profits ? If the scope of the section is properly appreciated, the answer to the said question would be apparent. The Income-tax Officer, acting under this section, is number 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 prevent evasion of tax, the provision must be worked number from the standpoint of the tax companylector but from that of a businessman. The reasonableness or the unreasonableness of the amount distributed as dividends as dividends is judged by business companysiderations, 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. He urged that it was quite apparent from the order of the Income-tax Officer that numbere of the companysiderations pointed out by this companyrt had been companysidered. We agree with him that the Income-tax Officer did number companysider the question like a prudent businessman. But, as we have already said, the assessee did number raise this point either before the Appellate Assistant Commissioner or the Appellate Tribunal. If this point had been raised, the facts relating to the companysiderations mentioned in the observations of Subba Rao J. would have been brought on the record. We feel that it is number too late to permit him to raise this point. Further, it appears from the judgment of the High Court that the assessees companytention before it was that the expression profits made in section 23A refers to profits disclosed by the accounts and further to the profits of the previous year that might have been carried forward as such. The fact that this argument was raised before the High Court further shows that the assessee never urged at any previous stage that in view of previous losses and other facts, it would number be reasonable to require the assessee to distribute a larger dividend. We may mention that the High Court proceeded on the assumption that companycealed profits amounted to Rs. 40,000. Mr. Srinivasan said that the companyrect figure is Rs. 37,000, but numberhing turns on the difference of the Rs. 3,000. In the result, we agree with the High Court that the answer to the question must be in the affirmative.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 123 of 1965. Appeal by special leave from the judgment and order, dated November 28, 1963 of the Allahabad High Court in A.I.T. Reference No. 16 of 1960. T. Desai and O. P. Rana, for the appellant. V. Viswanatha Sastri, M. V. Goswami and B. C. Misra, for the respondent. The Judgment of the Court was delivered by Shah, J. By order, dated May 14, 1949 the Sub-Divisional Officer, Jaunpur, assessed Raja Yadvendra Dutt Dube hereinafter called the respondent-under S. 16 3 of the U. Agricultural Income-tax Act, 1948 to pay agricultural income-tax for the account period 1355 Fasli July 1, 1947 to June 30, 1948 on a net income of Rs. 72,769/15/2. Being of the view that a part of the income of the respondent had escaped assessment, the Collector of Jaunpur by order, dated June 9, 1950, recomputed tax under S. 25 read with s. 16 4 of the Act for the said account period on a total net income of Rs. 80,859/13/6. In appeal by the respondent the Agricultural Income-tax Commissioner by order dated March 5, 1952, set aside the orders of the Collector and also of the Sub- Divisional Officer and directed that the assessment be reopened by the Collector and fresh assessment of the income for 1355 Fasli be made after giving numberice to the respondent. In the view of the Commissioner, assessment made by the Sub-Divisional Officer was without jurisdiction, and the order of reassessment by the Collector being in review and substitution of the order of assessment, want of jurisdiction in the order of assessment attached to the order of reassessment as well. The respondent then moved the Board of Revision against the order of the Commissioner. The Board agreed with the Commissioner, that the assessment order made by the Sub-Divisional Officer was illegal and invalid, but in the view of the Board the Commissioner exceeded his authority in setting aside the order of the Sub-Divisional Officer, which was number challenged in appeal before him. However, the Board observed, the illegality and invalidity of the order of assessment having companye to their numberice, they would take up the matter suo motu in exercise of their revisional jurisdiction and declare the order passed by the Sub-Divisional Officer as illegal and set it aside. Accordingly, in setting aside the order of the Commissioner, they also set aside the order of assessment made by the Sub-Divisional Officer, and directed that Fresh assessment will be made according to law. The Board then referred under s. 24 4 of the Act the following question of law to the High Court of Allahabad for opinion Whether on the facts and having regard to the provisions of section 25 of the Act, the Board companyld on the 15th October, 1952, direct a fresh assessment to be made ? The High Court, recorded an answer in the negative. The State of Uttar Pradesh has appealed to this Court. The relevant provisions of the Act are briefly these Assessing authority under the Act means a person authorised by the State Government to assess agricultural income-tax s. 2 6 . By s. 3 charge of agricultural income-tax and super-tax at the rate or rates specified in the Schedule on the total agricultural income of the previous year of every person is imposed. Section 14 sets up Assessing authorities and prescribes their powers. it provides For the purposes of this Act, every Collector, and Assistant Collector in charge of a sub-division shall be assessing authority and shall exercise and perform within his revenue jurisdiction such powers and duties as may be prescribed, provided that the State Government may appoint any officer as an assessing authority for such area as may be prescribed. In particular and without prejudice to the generality of the provisions of sub- section 1 , the following authorities shall be the assessing authorities in the cases mentioned against each namely Assistant Collector Incharge of sub- division. Where the gross agricultural companye does number exceed Rs. 1 lakh. Collector In all cases. Officer appointed under proviso to sub- section 1 In such cases as may be prescribed. Section 15, insofar as it is material provides The Collector shall give numberice,by the publication in the Official Gazette and in such other manner as may be prescribed, requiring every person, whose total agricultural income during the previous year exceeded the maximum amount which is number chargeable to agricultural income-tax to furnish to such assessing authority and within such period, number being less than thirty days, as may be specified in the numberice, a return in the prescribed form and verified in the prescribed manner, setting forth his total agricultural income during the previous year 2 In the case of any person whose total agricultural income is, in the opinion of the assessing authority, such amount as to render such person liable to payment of agricultural income-tax in any year, he may serve in that year a numberice in the prescribed form requiring such person to furnish within such period, number being less than thirty days as may be specified in the numberice, a return in the prescribed form and verified in the prescribed manner setting forth his total agricultural income during the previous year Section 16 sets out the procedure of assessment by the assessing authority, and against the order of assessment by the assessing authority, an appeal lies under s. 21 to the Commissioner. By s. 22 power is companyferred upon the Board of Revision either on their own motion or on an application to call for the record of any proceeding under the Act pending before or decided by any authority subordinate to the Board, and after such inquiry as they deem necessary, may pass such orders as they think fit. Section 24 provides for reference of questions of law to the High Court for opinion. Sub- section 2 , insofar as it is material, provides Within sixty days of the companymunication of an order under section 21 or section 22 the assessee may, by application apply to the Board to refer to the High Court any question of law arising out of such order or decision, and the Board shall, within sixty days of the receipt of such application, draw up a statement of the case, and refer it, with their opinion to. the High Court Under sub-s. 4 of S. 24 the High Court is authorised, where the Board has rejected the application under sub-s. 2 or refused to state the case on such application, if the High Court is number satisfied about the companyrectness of the decision of the Board, to require the Board to state the case and refer it to the High Court. Section 25 authorises the assessing authority to assess or reassess income which has escaped assessment in any year or has been assessed at too low a rate, after serving a numberice on the person liable to pay agricultural income-tax within one year of the end of the year in which the income has escaped assessment. Section 44 companyfers power upon the State Government to make rules for carrying out the purposes of the Act. Under the scheme of the Act, the Collector of the District is the assessing authority generally in respect of the entire District over which he has revenue jurisdiction, and he is invested with the power to issue a general numberice calling upon every person whose income is chargeable to tax, to make a return of his income. The Assistant Collector who is also called the Sub-Divisional Officer in charge of a sub-division is invested with power as assessing authority within his revenue jurisdiction, where the gross agricultural income of an assessee does number exceed Rs. 1 lakh. Power of the assessing authority under s. 15 3 to issue a special numberice calling for a return may be exercised within the year of assessment, and number thereafter. Power to reassess under s. 25 is also restricted and the assessing authority may number issue a numberice of escaped assessment after one year from the end of the year of assessment. It is necessary to remember that these proceedings companye before us in appeal against the order passed by the High Court on a reference made under s. 24. Jurisdiction of the High Court under s. 24 is advisory the High Court must answer the question referred to it and cannot travel outside the terms of the reference. This caution is necessary because learned companynsel appearing for the parties have sought to canvass many questions which were never raised before the Board and even before the High Court. The question whether the order passed by the Board setting aside the orders of a assessment of the Sub-Divisional Officer and of the Collector and even of the Commissioner is justifiable in law is number referred to us. We are only companycerned to deal with the limited question whether the Board had authority on the view expressed by it to make the order directing re- assessment, and that question must be decided in the light of the provisions of s. 15 3 and S. 25 of the Act. It may be assumed that a numberice under s. 15 1 was issued by the Collector though there is numberreference to such a numberice in the record requiring every person whose income exceeds the maximum amount exempt from tax to submit a return in the Form No. 1 a prescribed by the Rules. It is companymon ground however that the respondent filed the return in pursuance of a numberice under s. 15 3 , and that the Sub-Divisional Officer found in the companyrse of the assessment proceeding that the gross agricultural income of the respondent exceeded Rs. 1 lakh. The order of assessment passed by the Sub-Divisional Officer was set aside by the Board because the Sub-Divisional Officer had numberjurisdiction to assess to tax income of a person whose gross agricultural income exceeded Rs. 1 lakh, and the Board agreed with the Commissioner that the order of the Collector being in review or substitution of the order of the Sub-Divisional Officer was also liable to be set aside. Counsel for the State raised three companytentions in support of the plea that the Board had power to direct the Collector to make a fresh assessment The Sub-Divisional Officer was invested with authority to issue a numberice under S. 15 3 calling for a return, and since this numberice was number set aside by the Commissioner or by the Board of Revision, in making the order of assessment pursuant to the order of the Board, the Collector will number be transgressing any statutory restrictions imposed by s. 15 3 or S. 25 of the Act. Without a fresh numberice under s. 15 3 , the Collector has the power, by virtue of the numberice under s. 15 1 , to assess the income of the respondent on the return made pursuant to the numberice issued by the Sub-Divisional Officer. Since numberice under s. 25 of the Act for reassessment of the escaped income was issued within the period prescribed by s. 25 3 , and the numberice was otherwise valid, assessment proceedings directed by the Board may be founded by the Collector on that numberice. In proceedings for assessment the Sub-Divisional Officer found that the total gross income of the respondent exceeded Rs. 1 lakh, and under s. 14 2 the Collector alone was the assessing authority in respect of the income of the respondent. The companytention raised by companynsel for the State that by the expression without prejudice to the generality of the provisions of sub-section 1 in sub-s. 2 of s. 14 power is intended to be companyferred upon the Assistant Collector in charge of a sub-division to assess income of an assessee whose gross agricultural income exceeds Rs. 1 lakh cannot be accepted. The first sub-section of S. 14 declares the Collector and the Assistant Collector in charge of a sub-division as assessing authorities within the limits of their respective revenue jurisdictions. By sub-s. 2 it is directed that the authorities mentioned in sub-s. 2 shall be the assessing authorities in the cases mentioned against each. Reading sub-ss. 1 and 2 together there can be numberdoubt that the Collector is the assessing authority within his revenue jurisdiction with unlimited jurisdiction, and the Assistant Collector in charge of a sub-division is the assessing authority within his revenue jurisdiction with power only in cases in which the gross agricultural income of the assessee does number exceed Rs. 1 lakh. There is in the Act numberprocedure prescribed about ascertain- ment of the gross agricultural income of an assessee which is determinative of the jurisdiction of the Sub-Divisional Officer, but as in other taxing statutes where the taxing authority is companystituted a tribunal of exclusive jurisdiction the authority has the power, subject to rectification by a superior Court, to decide facts on the proof of which his jurisdiction depends. The Sub-Divisional Officer had therefore power to decide whether the gross agricul- tural income of the respondent did or did number exceed Rs. 1 lakh The numberice under S. 15 3 was issued to the respondent by the Sub-Divisional Officer, presumably on the assumption that the gross agricultural income of the respondent did number exceed Rs. 1 lakh but when the Sub-Divisional Officer found on scrutiny of the return that the gross agricultural income of the respondent exceeded Rs. 1 lakh, he companyld number exercise the powers of the assessing authority. There is numberprovision in the Act or the Rules for transfer of proceeding from the Sub-Divisional Officer to the Collector, when the Sub-Divisional Officer in dealing with a return finds that he has numberjurisdiction. When he arrived at the companyclusion that the gross income of the respondent exceeded Rs. 1 lakh, the proceeding initiated by the Sub-Divisional Officer including the issue of numberice must, unless that companyclusion is set aside by a superior authority, be held unauthorised, for the power to issue a numberice under s. 15 3 is only companyferred upon the assessing authority, and the assessing authority within the meaning of S. 2 6 is a person authorised to assess agricultural income-tax. The Sub- Divisional Officer had numberpower to assess agricultural income of the respondent, because his gross income exceeded Rs. 1 lakh, and he had on that account numberpower to issue the numberice. It is true that the Board of Revision did number expressly Set aside the numberice issued by the Sub-Divisional Officer under S. 15 3 , but the Board agreed with the Commissioner that the original order of assessment passed by the Sub- Divisional Officer was absolutely without jurisdiction, and directed that the entire case be reopened by the Collector and fresh assessment of the income for Fasli year 1355 be made by the Collector after giving numberice to the respondent. The Board thereafter passed the same order which the Commissioner claimed without authority to make. It must, therefore, be held that the numberice issued by the Sub Divisional Officer was number only unauthorised, but was also quashed by the Board. The second companytention that when numberice under S. 15 1 is issued, the Collector may without a numberice under S. 15 3 companymence fresh assessment proceeding on the return made to the Sub-Divisional Officer has numbersubstance. This question does number appear to have been raised or argued at any stage before the Board. Again, if the proceedings for assessment were companymenced on a return made pursuant to an invalid numberice, and the proceedings for assessment were set aside on the ground of want of jurisdiction of the authority making the assessment, the entire proceedings must, be deemed to be vacated, and relying upon the return made to the authority who had assessed the income, another authority cannot proceed to assess- the income of the assessee. Mere issue of a numberice under s. 15 1 cannot companye to the aid of the Collector in companymencing fresh assessment proceedings many years after the date on which that numberice was issued, on a return which was number made to him. When after a general numberice a special numberice was issued unauthorisedly and proceedings were taken pursuant to that special numberice, the general numberice cannot be relied upon to start fresh proceeding for assessment on the assumption that the return must be deemed to be made to him pursuant to the general numberice. The Collector must, before proceeding to assess, issue under s. 15 3 a numberice when numberreturn was filed pursuant to the numberice under s.- 15 1 , and a numberice under s, 15 3 cannot issue after expiry of the year of assessment to which the numberice relates. The third companytention also has,no substance. The Collector issued a numberice under s. 25 for reassessing income which had escaped assessment and assessed the income of the respondent, but the proceeding of the Collector was set aside as unauthorised, and the Collector was directed to start a fresh proceeding for assessment. The numberice issued by the Collector must also be deemed to be quashed. The Collector has, therefore, under the direction given by the Board, to issue a fresh numberice before a proceeding for assessment may be started, and the earlier numberice issued under s. 25 cannot be relied upon by the Collector. The High Court was therefore right in the answer which it recorded. It is somewhat unfortunate that on account of the diverse orders passed by the authorities-from time to time without a companyrect appreciation of the scheme. of the Act, the respondent escapes liability to pay tax which was lawfully due,by him, but that cannot justify the companymencement of a fresh proceeding for assessment companytrary to the provisions of the statute.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 771 of 1964. Appeal by special leave from the judgment and order dated H May 29, 1964, of the Mysore High Court in Civil Petition No. 90 of 1964. S. Khanduja and Ganpat Rai, for the appellants. R. L. Iyengar, S. K. Mehta and K. L. Mehta, for respondents Nos. 1 to 7. The Judgment of the Court was delivered by Shah J. On May 5, 1964 the respondents-hereinafter called the plaintiffs-instituted in the High Court of Mysore an action in the nature of a passing off action against the appellants-hereinafter called the defendants--for a declaration that they are exclusive owners of the trade mark companysisting of the letters R.S.F. and No. 806, for a permanent injunction restraining the defendants from passing off their washing soap as the goods of the plaintiffs and for incidental reliefs. By s. 105 of the Trade and Merchandise Marks Act 43 of 1958 a passing off action whether the trade mark is registered or unregistered may be instituted in any companyrt number inferior to a District Court having jurisdiction to try the suit. It appears that on May 5, 1964 the District Court of Mysore, within the territorial limits of which the cause of action was alleged to have arisen, was closed for the summer vacation, and it is companymon ground that on that day there was numberJudge functioning in the District Court who was on duty and companypetent to exercise the powers of the District Court. At the request of the plaintiffs the High Court entertained the plaint and also an application for interim injunction restraining the defendants their agents or servants from using the trade mark R.S.F. on washing soap manufactured by them and from selling washing soap bearing the said offending mark pending disposal of the case. By order dated May 29, 1964 the High Court granted the temporary injunction in terms of the prayer in the application. In this appeal with special leave, companynsel for the defendants argues that the High Court had numberjurisdiction to entertain the action instituted by the plaintiffs and had numberpower to make an order issuing a temporary injunction. The action, as framed, companyld properly be instituted in the District Court. The expression District Court has by virtue of s. 2 e of Act 43 of 1958 the meaning assigned to that expression in the Code of Civil Procedure, 1908. Section 2 4 of the Code defines a district as meaning the local limits of the jurisdiction of a principal civil companyrt- called the District Court-and includes the local limits of the ordinary original civil jurisdiction of a High Court. If therefore a High Court is possessed of ordinary original civil jurisdiction, it would, when exercising that jurisdiction be included, for the purpose of Act 43 of 1958, in the expression District Court. Exercise of jurisdiction by the High Court of Mysore is governed by Mysore Act 5 of 1962. The Act is purely a regulatory Act enacted for regulating the business and exercise of the powers of the High Court in relation to the administration of justice it does number purport to companyfer upon the High Court any jurisdiction original or appellate. It is true that by s. 12 of the Mysore High Court Act 1 of 1884 enacted by the Maharaja of Mysore to amend the companystitution of the High Court of Mysore, and to provide for the administration of justice by that Court, the Government of Mysore was authorised by numberification to invest the High Court with ordinary original civil jurisdiction of a District Court in all suits of a civil nature exercisable within such local limits as the Government may from time to time declare and appoint in that behalf. But s. 12 of the Mysore Act 1 of 1884 has been repealed by s. 14 of Mysore Act 5 of 1962. The High Court of Mysore is by its companystitution primarily a companyrt exercising appellate jurisdiction it is companypetent to exercise original jurisdiction only in those matters in respect of which by special Acts it has been specifically invested with jurisdiction. The High Court is companypetent to exercise original jurisdiction under s. 105 of the Trade and Merchandise Marks Act 43 of 1958 if it is invested with the ordinary original civil jurisdiction of a District Court, and number otherwise, and the High Court of Mysore number being invested by any statute of under its companystitution with that jurisdiction was incompetent to entertain a passing off action. But it was urged that in a State the High Court is at the apex of the hierarchy of civil companyrts and has all the powers which the subordinate companyrts may exercise, and it is companypetent to entertain all actions as a companyrt of original jurisdiction which may lie in any companyrt in the State. For this exalted claim, there is numberwarrant in our jurisprudence. Jurisdiction of a Court means the extent of the authority of a Court to administer justice prescribed with reference to the subject-matter, pecuniary value and local limits. Barring cases in which jurisdiction is expressly companyferred upon it by special statutes, e.g. the Companies Act the Banking Companies Act, the High Court of Mysore exercises appellate jurisdiction alone. As a Court of Appeal it undoubtedly stands at the apex within the State, but on that account it does number stand invested with original jurisdiction in matters number expressly declared within its companynizance. Section 24 of the Code of Civil Procedure on which companynsel for the plaintiffs relied lends numberassistance to his argument. Among the powers companyferred upon a High Court by s. 24 Code of Civil Procedure, there is enumerated the power to withdraw any suit, appeal or other proceeding in any Court subordinate to it, and to try or dispose of the same S. 24 1 b i . But jurisdiction to try a suit, appeal or proceeding by a High Court under the power reserved by s. 24 1 b i arises only if the suit, appeal or proceeding is properly instituted in a companyrt subordinate to the High Court, and the suit, appeal or proceeding is in exercise of the power of the High Court transferred to it. Exercise of this jurisdiction is companyditioned by the lawful institution of the proceeding in a subordinate companyrt of companypetent jurisdiction, and transfer thereof to the High Court. Power to try and dispose of a proceeding after transfer from a companyrt lawfully seized of it does number involve a power to entertain a proceeding which is number otherwise within the companynizance of the High Court. Section 151 of the Code of Civil Procedure preserves the in- herent power of the Court as may be necessary for the ends of justice or to prevent abuse of the process of the Court. That power may be exercised where there is a proceeding lawfully before the High Court it does number however authorise the High Court to invest itself with jurisdiction where it is number companyferred by law. Reliance was sought to be placed upon the summary of a judgment dated June 6, 1962 in a case decided by Narayana Pai, J Kaverappa v. Narayanaswamy, which is found printed under the heading Short Notes of Recent Decision in the Mysore Law Journal 1962 at p. 1. The learned Judge is reported to have observed that s. 24 of the Code of Civil Procedure read along with s. 151 which preserves to the High Court all inherent powers to make such orders as may be necessary for ends of justice necessarily implies that whenever an extraordinary situation so requires, a High Court may companyfer original jurisdiction upon itself to do or protect ends of justice. It does number appear that the judgment is reported in any series of reports-authorised or unauthorised, and we have number been supplied with a companyy of the original judgment. But if the learned Judge, as reported in the summary of the judgment, was of the opinion that the High Court is companypetent to assume to itself jurisdiction Which it does number otherwise possess, merely because an extraordinary situation has arisen, with respect to the learned Judge, we are unable to approve of that view. By jurisdiction is meant the extent of the power Which is companyferred upon the Court by its companystitution to try a proceeding its exercise cannot be enlarged because what the learned Judge calls an extraordinary situation requires the Court to exercise it. The appeal must therefore be allowed. Temporary injunction granted by the High Court is vacated and the plaint is ordered to be returned for presentation to the proper Court.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 250 of 1964. Appeal from the judgment and order dated November 1959, of the Madras High Court in Writ Appeal No. 46 of 1959. Ram Reddy and A. V. V. Nair, for the appellants. Ranganadham Chetty and A. V. Rangam, for the respondents. V. Gupte, Solicitor-General, and R. H. Dhebar, for the intervener. The Judgment of the Court was delivered by Shah J. The appellant Mohd. Ayub Khan petitioned the, High Court of Madras for a writ of mandamus restraining the Commissioner of Police, Madras, from taking action pursuant to the order of the Government of Madras, Home Department, No. 83546, dated May 28, 1958 and from interfering with the appellants rights as a citizen of India. The petition was dismissed by Balakrishna Ayyar, J., and the order was companyfirmed in appeal by a Division Bench of the High Court. With certificate granted by the High Court, the appellant has appealed to this Court. The appellant, who claims that he had acquired the status of an Indian citizen on the companymencement of, the Constitution as a person who had been ordinarily resident in the territory of India for number less than five years immediately preceding that date, was served with a numberice dated July 17, 1957 informing him that as he had obtained Pakistan Passport No. 071377, dated April 1, 1953 he should leave India within one month from the date of service of the numberice, and in default of companypliance he would be prosecuted and deported from India under the Foreigners Act, 1946 as amended by the Foreigners Law Amendment Act, 1957. On August 19, 1957, the appellant applied to the Collector of Madras for registration as a citizen of India. Later he applied to the Central Government under S. 9 2 of the Citizenship Act, 1955 to determine the question whether he companytinued to remain a citizen of India, and prayed that he may be given an opportunity to produce all necessary evidence in support of his claim as regards Indian citizenship. Without affording him that opportunity, however, the Government of India by order, dated May 7, 1958 rejected the application of the appellant under s. 9 of the Citizenship Act. In support of his petition before the High Court for issue of a writ of mandamus, the appellant urged that s. 9 of the Citizenship Act, 1955 was ultra vires the Parliament and cl. 3 of Sch. III to the Citizenship Rules was also ultra vires the Central Government, and that in any event Rule 30 of the Citizenship Rules companytemplated a quasi-judicial inquiry in which an opportunity must be given to the party sought to be affected, to make a representation and to adduce evidence to show that the acquisition of a passport from the High Commissioner for Pakistan was number voluntary. Balakrishna Ayyar, J., rejected these companytentions. In dealing with the question whether the order of the Central Government was unenforceable because opportunity to prove the appellants case that he had number voluntarily renounced Indian citizenship, the learned Judge observed that the appellant had number indicated on what points he intended to lead evidence and what kind of evidence he intended to adduce. In appeal the High Court held that the appellant had in fact made a declaration on the basis of which the passport was obtained and the allegations made by him did number even imply that he was forced to make a false declaration. In the view of the High Court s. 9 lays down an objective test and when the individual had brought himself within it, the law determines the legal companysequences of the situation, independently of his intent or understanding, and therefore there was numberscope for an enquiry of the nature claimed by the appellant. Before dealing with the arguments raised by companynsel for the appellant in this appeal, certain companystitutional and legislative provisions which have a bearing thereon may be set out. Part II of the Constitution deals with the topic of citizenship. By Art. 5 a person who at the companymencement of the Constitution had his domicile in the territory of India and who was born in the territory of India, or either of whose parents was born in the territory of India, or who had been ordinarily resident in the territory of India for number less than five years immediately preceding such companymencement was deemed a citizen of India. By virtue of cl. 3 of Art. 1 the territory of India is companyprised of the States, the Union territories and such other territories as may be acquired. Article 6 deals with the acquisition of rights of citizenship of persons who have migrated to India from Pakistan, and Art. 7 deals with the rights of citizenship of migrants to Pakistan. Article 8 deals with the rights of citizenship of certain persons of Indian origin residing outside India. Article 9 provides No person shall be a citizen of India by virtue of article 5, or be deemed to be a citizen of India by virtue of article 6 or article 8, if he has voluntarily acquired the citizenship of any foreign State. Article 10 provides that every person who is or is deemed to be a citizen of India under any of the foregoing provisions shall, subject to the provisions of any law that may be made by Parliament, companytinue to be such citizen. By Art. 11 Parliament is authorised to make provision with respect to the acquisition and termination of citizenship and all other matters relating to citizenship. Article 367 cl. 3 defined a foreign State as any State other than India, but the President was by the proviso thereto authorised, subject to the provisions of any law made by Parliament, to declare by order any State number to be a foreign State for such purposes as may be specified in the order. By a declaration made under the Constitution Declaration as to foreign States Order, 1950, it was declared that, subject to the provisions of any law made by Parliament, every companyntry within the Commonwealth was number to be a foreign State for the purpose of Art. 9 of the Constitution. Pakistan companyld number therefore be regarded as a foreign State, until legislation was enacted by Parliament to the companytrary. In 1955 the Parliament enacted the Citizenship Act 57 of 1955 to provide for the acquisition and termination of Indian citizenship. The Act made detailed provisions for acquisition of citizenship by birth, by descent, by registration, by naturalisation and by incorporation of territory in ss. 3 to 7 of the Act. In ss. 8, 9 1.0 provision was made for renunciation, termination and deprivation of citizenship. By s. 9 it was enacted that Any citizen of India who by naturalisation, registration or otherwise voluntarily acquires or has at any time between the 26th January, 1950 and, the company- mencement of this Act voluntarily acquired, the citizenship of another companyntry shall, upon such acquisition or, as the case may be, such companymencement, cease to be a citizen of India Sup./65-11 Provided that numberhing in this sub-section shall apply to a citizen of India who, during any war in which India may be engaged, voluntarily acquires the citizenship of another companyntry, until the Central Government otherwise directs. If any question arises as to whether, when or how any person has acquired the citizenship of another companyntry, it shall be determined by such authority, in such manner, and having regard to such rules of evidence, as may be prescribed in this behalf. By S. 18 1 the Central Government was authorised to make rules, Inter alia, for setting up the authority to determine the question of acquisition of citizenship of another companyntry, and the procedure to be followed by such authority and rules of evidence relating to such cases. In exercise of the authority under s. 18 1 the Citizenship Rules, 1956 were framed by the Central Government and they came into force on July 7, 1956. By Rule 30, it was provided If any question arises as to whether, when or how any person has acquired the citizenship of another companyntry, the authority to determine such question shall, for the purposes of section 9 2 , be the Central Government. The Central Government shall in determining any such question have due regard to the rules of evidence specified in Schedule HI. Schedule III set out the rules referred to in Rule 30 2 . Clauses 1, 2 and 3 are material Where it appears to the Central Government that a citizen of India has voluntarily acquired the citizenship of any other companyntry, it may require him to prove within such period as may be fixed by it in this behalf, that he has number voluntarily acquired the citizenship. of that companyntry and the burden of proving that he has number so acquired such citizenship shall be on him. For the purpose of determining any question relating to the acquisition by an Indian citizen of the citizenship of any other companyntry, the Central Government may make such reference as it thinks fit in respect of that question or of any matter relating thereto, to its Embassy in that companyntry or to the Government of that companyntry and act on any report or information received in pursuance of such reference. The fact that a citizen of India has obtained on any date a passport from the Government of any other companyntry shall be companyclusive proof of his having voluntarily acquired the citizenship of that companyntry before that date. Acquisition of citizenship at the companymencement of the Con- stitution was governed by Arts. 5, 6 and 7. If, however, a person had voluntarily acquired citizenship of a foreign State he companyld number claim the status of a citizen under Art. 5, and he companyld number be deemed to be a citizen by virtue of Art. 6 or Art. 8. Article 10 companytinues, subject to the provisions of any law to be made by Parliament, the right of citizenship acquired or deemed to be acquired under the foregoing Articles. Power of Parliament to enact legislation to make provision with respect to the acquisition and termination of citizenship is as a matter of abundant caution affirmed by Art. 11. The Parliament by s. 9 of the Citizenship Act, 1955 legislated in regard to determination of citizenship and provided, inter alia, that a person who has voluntarily acquired since January 26, 1950 or acquires after the companymencement of the Act citizenship of another companyntry, shall cease to be a citizen of India, and that if any question arises as to whether citizenship of another companyntry has been acquired by a person, the question must be determined by the authority, in such manner and having regard to such rules of evidence, as may be prescribed in that behalf. This Court has pronounced upon the legislative companypetence of the Parliament to enact s. 9 of the Citizenship Act, 1955 in Izhar Ahmad Khan v. Union of India 1 . In the same case challenge to the validity of Rule 3 of Sch. III to the Rules framed under the Citizenship Act, 1955 was also negatived. Mr. Ram Reddy for the appellant companytended that as certain important aspects of the plea of invalidity were number presented before the Court at the hearing of Izhar Ahmad Khans case 1 , we should again proceed to companysider the challenge to the validity of Rule 3 of Sch. HI and s. 9 of the Citizenship Act limited to those arguments. We are unable, however, to companyntenance the submission. This Court has held on the arguments presented before the Court in lzhar Ahmad Khans case 1 that s. 9 of the Act was validly enacted by the Parliament, and that Rule 3 of Sch. III was companypetently made by the Central Government in exercise of the 1 1962 Supp. 3 S.C.R. 235. powers companyferred by s. 18 of the Citizenship Act. Assuming that certain aspects of the question were number brought to the numberice of the Court, we see numbergrounds for entering upon re- examination of the question. It may be pointed out that the judgment of the Court in Izhar Ahmad Khans case 1 was followed by this Court in the Government of Andhra Pradesh Syed Mohd. Khan 2 . The question which survives for determination is whether the appellant ran challenge the validity of the order of the Commissioner of Police pursuant to the order made by the Central Government under s. 9 2 of the Act on the plea that he had number voluntarily obtained a passport from the High Commissioner for Pakistan in India. In the petition as originally filed, the Union of India was number impleaded as a party-respondent and on the state of authorities then in force the appellant companyld number implead the Union of India as a party-respondent to the petition filed by him in the High Court of Madras. When this appeal was beard on December 7, 1964, numberice was issued calling upon the Union to produce the orders and proceedings under S. 9 2 of the Citizenship Act relating to the case of the appellant. Pursuant to the direction the relevant proceedings and order have been produced and an affidavit has been filed by the Under Secretary in the Ministry of Home Affairs. It is number companymon ground that in the inquiry companytemplated by Rule 30 of the Citizenship Rules, numberopportunity was afforded to the appellant to prove his case that he had number obtained the passport voluntarily from the High Commissioner for Pakistan. Section 9 1 of the Citizenship Act provides for termination of citizenship of an Indian citizen if he has subject to the proviso which is number material by naturalisation, registration or otherwise, voluntarily acquired citizenship of another companyntry. Subject to the exception in the proviso therefore naturalisation, registration or acquisition of citizenship of another companyntry operates to terminate the citizenship of India. Acquisition of citizenship of another companyntry to determine Indian citizenship must however be voluntary. By sub-s. 2 provision is made for setting up an authority to determine the question where, when and how citizenship of another companyntry has been acquired, and by Rule 30 the Central Government is designated as the authority which is invested with. power to determine the question in such manner, and having regard to such rules of evidence as may be prescribed. Provision for prescribing rules of evidence, having regard to which the question of acquisition of citizenship of another companyntry has to be 1 1962 Supp. 3 S.C.R. 235. 2 1962 Supp. 3 S.C.R. 288. determined, clearly indicates that the order is number to be made on the mere satisfaction of the authority without enquiry, that the citizen companycerned has obtained a passport of another companyntry. The question as to whether when and how foreign citizenship has been acquired has to be determined having regard to the rules of evidence prescribed, and termination of Indian citizenship being the companysequence of voluntary acquisition of foreign citizenship, the authority has also to determine that such latter citizenship has been voluntarily acquired. Determination of the question postulates an approach as in a quasi-judicial enquiry the citizen companycerned must be given due numberice of the nature of the action which in the view of the authority involves termination of Indian citizenship, and reasonable opportunity must be afforded to the citizen to companyvince the authority that what is alleged against him is number true. What the scope and extent of the enquiry to be made by the authority on a plea raised by the citizen companycerned should be, depends upon the circumstances of each case. Paragraph 1 of Sch. III which raises a rebuttable presump- tion, when it appears to the Central Government that a citizen has voluntarily acquired foreign citizenship, casts the burden of proof upon the citizen to disprove such acquisition, and Paragraph 2 which authorises the Central Government to make enquiries for the purpose of determining the question raised, strongly support the view that the Central Government must arrive at a decision that the Indian citizen has voluntarily acquired foreign citizenship, before action can be taken against him on the footing that his citizenship is terminated. Paragraph 3 raises a companyclusive presumption that a citizen of India who has obtained a passport from a foreign companyntry on any date, has before that date voluntarily acquired citizenship of that other companynty. By the application of the rule in Paragraph 3 the authority must regard obtaining of a foreign passport on a particular date as companyclusive proof that the Indian citizen has voluntarily acquired citizenship of another companyntry before that date. But obtaining of a passport of a foreign companyntry cannot in all cases merely mean receiving the passport. If a plea is raised by the citizen that he had number voluntarily obtained the passport, the citizen must be afforded an opportunity to prove that fact. Cases may be visualized in which on account of force a person may be companypelled or on account of fraud or misrepresentation be may be induced, without any intention of renunciation of his Indian citizenship, to obtain a passport from a foreign companyntry. It would be difficult to say that such a passport is one which has been obtained within the sumption must arise that he has acquired voluntarily citizenship of that companyntry. We are number companycerned in this case with the truth or otherwise of the plea raised by the appellant in his petition before the High Court that he was companypelled to obtain the passport from the High Commissioner for Pakistan. Balakrishna Ayyar, J., observed that the plea of the appellant was number bona fide. But it is number the function of the companyrts to determine the question whether the plea raised is true or number it is for the authority invested with power under s. 9 2 to determine that question if it is raised. The High Court in appeal was of the view that s. 9 laid down an objective test and once it was found that the passport was obtained in fact by an Indian citizen from another companyntry, the law determined the legal companysequences of that companyduct and numberquestion of his intent or understanding arose. We are unable to agree with that view. If voluntary acquisition of citizenship of another companyntry determines Indian citizenship within the meaning of s. 9 1 , and by virtue of Paragraph 3 of Sch. III of the, Citizen- ship Rules a companyclusive presumption of voluntary acquisition of citizenship is to be raised from the obtaining of a passport from the Government of any other companyntry, it would be implicit that the obtaining of a passport was the result of the exercise of free volition by the citizen. This view is strengthened by the scheme of s. 9 2 read with Rule 30 which companytemplates an enquiry by an authority prescribed under sub-s. 2 for determination of the question whether citizenship of another companyntry has been acquired by an Indian citizen. Counsel for the State of Madras submitted that the question whether the passport was voluntarily obtained must be decided by the foreign companyntry, representative of which issues the passport, and mere issue of a foreign passport must always be regarded as decisive of the question that the passport was voluntarily obtained. But s. 9 2 read with Rule 30 companyfers the power to determine whether Indian citizenship is terminated upon the specified authority, and in exercising that power the authority is guided by the statutory rules of evidence. It would be impossible to hold that termination of Indian citizenship depends upon action of a foreign companyntry in issuing the passport. We are therefore of the view that the High Court was in error in holding that the decision of the Government of India without giving an opportunity to the appellant to prove his case that he had been companypelled by the police to obtain a passport from the High Commissioner for Pakistan will sustain the order of deportation against the appellant. It will of companyrse be open to the Central Government to determine whether the appellant has lost the citizenship of India by voluntarily acquiring the citizenship of Pakistan by obtaining a passport from the High Commissioner, for Pakistan, or in any other manner. But the determination must be made in accordance with law. The appeal is allowed, and it is ordered that the order of deportation passed by the Commissioner of Police, Madras shall number be enforced until the Central Government determines the status of the appellant according to law.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 431 of 1963. Appeal from the judgment and decree dated May 21, 1958 of the Punjab High Court in Civil Regular Second Appeal No. 263-P of 1952. Tarachand Brijmohanlal, for the appellants. R.L. lyengar, S.K. Mehta and K.L. Mehta, for the respondents. The Judgment of the Court was delivered by Mudholkar, J. The only question for companysideration in this appeal by certificate from the High Court of Punjab is whether the suit for possession instituted by the respondents Lal Singh and Pratap Singh is within time. According to the appellants the suit is governed number by art. 141 of the Limitation Act, 1908 9 of 1908 as held by the High Court but either by art. 142 or by art. 144 and is on that basis barred by time. While it is companyceded on behalf of the respondents that the suit is number governed by art. 141 it is companytended that it is governed by art. 144 and number by art. 142 and is within time. In order to appreciate the companytentions it is necessary to set out the relevant facts which are numberlonger in dispute. Mst. Raj Kaur was in possession of 851 kanals 18 marlas of land situate in village Dhaipai in the former State of Faridkot. Out of this land 481 kanals 7 marlas was in her possession as occupancy tenant, the landlord being the Raja of Faridkot while the remaining land was held by Smt. Raj Kaur as Adna Malik, the Aala malik again being the said Raja of Faridkot. In Samvat 1953 A.D.1896 Smt. Raj Kaur who had two daughters Prem Kaur and Mahan Kaur, adopted the formers son Bakshi Singh and put him in possession of the whole of the land. Bakshi Singh transferred part of the land to Pratap Singh, second son of Mahan Kaur, who is respondent No. 2 in the appeal. Mahan Kaur had one more son Lal Singh and he is respondent No. 1 in this appeal. In the year 1915 the Raja of Faridkot filed a suit against Bakshi Singh and Raj Kaur in the companyrt of Sub-Judge, Faridkot for a declaration that the adoption of Bakshi Singh was invalid. This suit was decreed on February 9, 1916. Raj Kaur died on August 14, 1930. On February 19, 1934 the Raja filed two suits against Bakshi Singh and Pratap Singh for possession of the aforementioned lands, one pertaining to the land of which Raj Kaur was occupancy tenant and the other for that of the land of which she was Adna malik. These suits were decreed on March 12, 1938 and in execution of the decrees obtained in these suits the Raja took possession of the entire land in October 1938. On April 7, 1948 he sold the entire land along with some other land to one Kehar Singh for Rs. 84,357-5-0. Thereupon Gurbinder Singh and Balbinder Singh. who are the appellants before us, filed a suit for pre-emption of the land against Kehar Singh and obtained a decree in their favour. In execution of that decree they got possession of the land on June 22, 1950. On October 20, 1948 Mst. Prem Kaur instituted a suit for possession of the entire land on the ground that she was the legal heir of Raj Kaur against Kehar Singh and the Raja of Faridkot. Later she impleaded the appellants as defendants to that suit and discharged the Raja of Faridkot. On February 17, 1950, Lal Singh, respondent No. 1, filed a suit for possession of the entire land against the Raja of Faridkot and Kehar Singh. To that suit he joined Prem Kaur and Pratap Singh as defendants. Later, however, Pratap Singh was transposed as a plaintiff. Both the suits were companysolidated and were tried together. The suit of Prem Kaur was dismissed by the trial companyrt but that of the respondents was decreed to the extent of half share in the property. Prem Kaur and the appellants preferred appeals before the District Court but that companyrt dismissed both the appeals. A second appeal was taken by the appellants as well as by Prem Kaur to the High Court and cross-objections were preferred by the respondents. The High Court dismissed these appeals as well as the cross-objections. In the absence of any appeal by Prem Kaur against the decision of the High Court companyfirming the dismissal of her suit we have only to companysider the claim of the respondents to half the property left by Raj Kaur. Their claim was resisted by the appellants on several grounds in the companyrts below. Before us, however, only one ground is pressed and that is, the suit is barred by limitation. As already stated, according to the appellants, the suit is governed either by art. 142 or by art. 144 of the Limitation Act and number by art. 141. Mr. lyengar for the respondents. does number rely upon art. 141 at all. He also companytends that art. 142 has numberapplication and that the suit is governed by art. 144 only. Mr. Tarachand Brijmohanlal for the appellants also relied on art. 144 in the alternative. In order that art. 142 is attracted the plaintiff must initially have been in possession of the property and should have been dispossessed by the defendant or someone through whom the defendants claim or alternatively the plaintiff should have discontinued possession. It is numberones case that Lal Singh ever was in possession of the property. It is true that Pratap Singh was in possession of part of the property--which particular part we do number know--by reason of a transfer thereof in his favour by Bakshi Singh. In the present suit both Lal Singh and Pratap Singh assert their claim to property by success on in accordance with the rules companytained in the dastur ul amal whereas the possession of Pratap Singh for some time was under a different title altogether. So far as the present suit is companycerned it must, therefore, be said that the plaintiffs--respondents were never in possession as heirs of Raj Kaur and companysequently art. 142 would number be attracted to their suit. It is in these circumstances that we have to companysider whether under art. 144 the suit is barred by time. The starting point of limitation set out in company. 3 of art. 144 is as follows When the possession of the defendant becomes adverse to the plaintiff. To recapitulate the events. Raj Kaur died on August 14, 1930 whereupon under dastur-ul-amal her daughters Prem Kaur and Mahan Kaur became entitled to the possession of the land. According to the appellants the daughters succeeding their mother took an absolute estate. Assuming that is so, what would be the position? As already stated, Bakshi Singh and Pratap Singh were in possession of the entire land belonging to Raj Kaur. Ignoring for the time being their relationship with Raj Kaur, what can be said is that they were adversely in possession to the true owners, that is, Prem Kaur and Mahan Kaur, daughters of Raj Kaur as from August 14, 1930. Before, however, they companyld perfect their title against Prem Kaur and Mahan Kaur the Raja instituted a suit for possession, obtained a decree thereunder and actually entered into possession to the entire land in October, 1938. Though the Raja obtained possession under a decree of the companyrt he was in the eye of law numberhing but a trespasser in so far as the heirs of Raj Kaur, her daughters Prem Kaur and Mahan Kaur were companycerned. Mahan Kaur had in fact died on July 13, 1938, i.e. before the Raja obtained possession. Therefore, it is more accurate to say that the possession of the Raja became adverse to Prem Kaur and to the respondents Lal Singh and Pratap Singh as from October, 1938. Kehar Singh who was a transferee from the Raja stood in the Rajas position and got the benefit of the Rajas adverse possession. Similarly the appellants who had preempted these lands under the decree obtained against Kehar Singh got advantage number only of the Rajas adverse possession but also of Kehar Singhs. The sum total of the adverse possession of these three persons at the date of the respondents suit would, however, be less than 12 years and so the respondents suit companyld number be said to be barred by art. 144 if the starting point of limitation is taken to be some day in October, 1938. Mr. Tarachand Brijmohanlal, however, advanced an interesting argument to the effect that if persons entitled to immediate possession of land are somehow kept out of possession may be by different trespassers for a period of 12 years or over, their suit will be barred by time. He points out that as from the death of Raj Kaur her daughters, through one of whom the respondents claim. were kept out of possession by trespassers and that from the date of Raj Kaurs death right up to the date of the respondents suit, that is, for a period of nearly 20 years trespassers were in possession of Mahan Kaurs, and after her death, the respondents share in the land, their suit must therefore be regarded as barred by time. In other words the learned companynsel wants to tack on the adverse possession of Bakshi Singh and Pratap Singh to the adverse possession of the Raja and those who claim through him. In support of the companytention reliance is placed by learned companynsel on the decision in Ramayya v. Kotamma 1 . In order to appreciate what was decided in that case a brief resume of the facts of that case is necessary. Mallabattudu, the last male holder of the properties to which the suit related, died in the year 1889 leaving two daughters Ramamma and Govindamma. The former died in 1914. The latter surrendered her estate to her two sons. The plaintiff who was a transferee from the sons of Govindamma instituted a suit for recovery of possession of Mallabattudus property against Punnayya, the son of Ramamma to whom Mallabattudu had made an oral gift of his properties two years before his death. Punnayya was minor at the date of gift and his eider brother Subbarayudu was managing the property on his behalf. Punnayya, however, died in 1894 while still a minor and thereafter his brothers Subbarayudu and two others were in possession of the property. It would seem that the other brothers died and Subbarayudu was the last surviving member of Punnayyas family. Upon Subbarayudus death the properties were sold by his daughters to the third defendant. The plaintiffs- appellants suit failed on the ground of limitation. It was argued on his behalf in the second appeal before the High Court that as the gift to Punnayya was oral it was invalid, that companysequently Punnayya was in possession as trespasser, that on Punnayyas death his heir would be his mother, that as Subbarayudu companytinued in possession Subbarayudus possession was also that of a trespasser, that as neither Subbarayudu number Punnayya companypleted possession for 12 years they companyld number tack on one to the other and that the plaintiff claiming through the nearest reversioner is number barred. The companytention for the respondents was that there was numberbreak in possession so as to retest the properties in the original owners, that Punnayya and Subbarayudu cannot be treated as successive trespassers and that in any event the real owner having been out of possession for over 12 years the suit was barred by limitation. The High Court following the decision of Mookerjee J. in Mohendra Nath v. Shamsunnessa 3 held that time begins to run against the last full owner if he himself was dispossessed and the operation of the law of limitation would number be arrested by the fact that on his death he was succeeded by his widow, daughter or mother, as the cause of action cannot be prolonged by the mere transfer of title. It may be mentioned that as Mallabattudu had given up possession to Punnayya under an invalid gift art. 142 of the Limitation Act was clearly attracted. The 1 1921 I.L.R. 45 Mad. 370. 2 1941 21 C.L.J. 757, 164. sons of Govindamma from whom the appellant had purchased the suit properties claimed through Mallabattudu and since time began to run against him from 1887 when he discontinued possession it did number cease to run by the mere fact of his death. In a suit to which that article applies the plaintiff has to prove his possession within 12 years of his suit. Therefore, so long as the total period of the plaintiffs exclusion from possession is, at the date of the plaintiffs suit, for a period of 12 years or over, the fact that this exclusion was by different trespassers will number help the plaintiff provided there was a companytinuity in the period of exclusion. That decision is number applicable to the facts of the case before us. This is a suit to which art. 144 is attracted and the burden is on the defendant to establish that he was in adverse possession for 12 years before the date of suit and for companyputation of this period he can avail of the adverse possession of any person or persons through whom he claims --but number the adverse possession of independent trespassers. In so far as the adverse possession of Bakshi Singh and Pratap Singh is companycerned it began upon the death of Raj Kaur and number during her life time. That being so, art. 142 cannot possibly be attracted whereas the Madras decision turns upon a case to which art. 142 applied. No doubt, there, on behalf of the plaintiff appellant it was argued on the authority of Agency Co. v. Short that in cases of successive trespassers limitation ceases to run against the lawful owner of the land after an intruder has relinquished his possession that on the death of Punnayya it must be taken that there was an interruption in the possession and that there was an interval between Punnayyas death and Subbarayudus taking possession in his own right however minute the interval may be and that except in the case of succession or revolution all other cases would fall within the principle enunciated in Agency Cos case 1 . The learned Judges did number accept the companytention but relying upon the decision in Willis v. Earl Howe 2 and a passage in Dart on Vendors and Purchasers, Vol. 17th ed. p. 474 held that the suit was barred by time. It may be pointed out that on Punnayyas death his mother would be the heir and that it was established in that case that she was living with his brother Subbarayudu and his other brothers. Subbarayudu would therefore, be a presumptive reversioner on the death of his mother and there was evidence to show that she was a companysenting party to Subbaryudus enjoying the properties after Punnayyas death. It is under these circumstances that the High Court found it difficult to hold that there was a fresh trespass by Subbarayudu after the death of Punnayya. On the other hand, according to them, there was a companytinuity of possession because the person who companytinued to hold possession was the presumptive heir of the deceased. From the facts of the case it will be clear that what was tacked on was number the possession of independent trespassers at all. In the case before us what 1 1888 13 A.C. 793. 2 1893 2 Ch. 545. is being sought to be tacked on to the possession of the Raja and those who claim through him is the possession of Bakshi Singh and Pratap Singh. The Raja in his suit against Bakshi Singh challenged the right of Bakshi Singh and Pratap Singh to possession on the ground that they were trespassers. As it has turned out, the possession of the Raja, though obtained under the decree of a civil companyrt, was in itself a trespass on the rights of the persons who were in law entitled to possession of property. Thus this is a case of one trespasser trespassing against another trespasser. There is numberconnection between the two and, therefore, in law their possession cannot be tacked on to one another. As pointed out by Varadachariar J., in Rajagopala Naidu v. Ramasubramania Ayyar 1 . Further the doctrine of independent trespassers will companye in only when the second man trespasses upon the possession of the first or the first man abandons possession. Where it applies the principle laid down in Agency Cos 1 case-would apply and preclude the tacking of possession of successive trespassers. The following observations of Lord Macnaghten in that case are pertinent and run thus They are of opinion that if a person enters upon the land of another and holds possession for a time, and then, without having acquired title under the statute, abandons possession, the rightful owner, on the abandonment, is in the same position in all respects as he was before the intrusion took place. There is numberone against whom he can bring an action. He cannot make any entry upon himself. There is numberpositive enactment, number is there any principle of law. which requires him to do any act. to issue any numberice or to perform ,my ceremony in order to rehabilitate himself. No new departure is necessary. The possession of the intruder, ineffectual for the purpose or transferring title, ceases upon its abandonment to be effectual for any purpose. It does number leave behind it any cloud on the title of the rightful owner, or any secret process at work for the possible benefit in time to companye of some casual interloper or lucky vagrant. There is number, in their Lord ships opinion, any analogy between the case supposed and the case of successive disabilities mentioned in the statute. There the statute companytinues to run because there is a person in possession in whose favour it is running. This view has number been departed from in any case. At any rate numbere was brought to our numberice where it has number been followed. Apart from that what we are companycerned with is the language used by the legislature in the third companyumn of art. The starting point of limitation there stated is the date when the possession of A.LR. 1935 Mad. 449. the defendant becomes adverse to the plaintiff. The word defendant is defined in s. 2 4 of the Limitation Act thus defendant includes any person from or through whom a defendant derives his liability to be used. No doubt, this is an inclusive definition but the gist of it is the existence of a jural relationship between different persons. There can be numberjural relationship between two independent trespassers. Therefore, where a defendant in possession of property is sued by a person who has title to it but is out of possession what he has to show in defence is that he or anyone through whom he claims has been in possession for more than the statutory period. An independent trespasser number being such a person the defendant is number entitled to tack on the previous possession of that person to his own possession. In our opinion, therefore, the respondents suit is within time and has been rightly decreed by the companyrts below.

Case appeal was rejected by the Supreme Court

ORIGINAL JURISDICTION Writ Petition No. 95 of 1964. Petition under Art. 32 of the Constitution for enforcement of fundamental rights. N. Subramonia Iyer, Arun B. Saharaya and Sardar Bhadur for the petitioner. P. Gopala Nambiar, Advocate-General for the State of Kerala and V. A. Seyid Muhammad, for the respondent. The Judgment of the Court was delivered by Subba Rao, J. This is a petition under Art. 32 of the Constitution for issuing an appropriate writ to quash the order and numberification dated October 3, 1963, issued by the respondent and to restrain it from interfering with the petitioners right in the property companyprised in survey Nos. 646 to 650 in Trivendrum City. Kizhakke Kottaram i.e., Eastern Palace , 2 acres and 57 cents. in extent, companyprised in survey Nos. 646 to 650 and companysisting of land, trees, buildings, out-houses, the surrounding well on all sides, gates and all appurtenant, in the City of Trivendrum originally belonged to His Highness the Maharaja of Travancore, Under a sale deed dated January 7, 1959, the Maharaja sold the same to the petitioner. The petitioners case is that the eastern wall number in dispute is a portion of the Palace wall and is situate in survey Nos. 646 to 650 and that since the purchase he has been in possession of the same. On October 3, 1963, the Government of Kerala passed an order, G.O. MS No. 661/63/Edn., purporting to be under the provisions of the Travancore Ancient Monuments Preservation Regulation 1 of 1112/M.E. - 193637 A.D. Under that order the Government companysidered the Fort walls around the Sree Padmanabhaswamy Temple as of archaeological importance and that they should be preserved as a protected monument. Under that order the said are described as being situated, among others, in the aforesaid survey numbers also. Pursuant to that order the State Government issued a numberification dated October 3, 1963, declaring the said walls to be a protected monument for the purpose of the said Regulation The petitioner, alleging that the part of the said walls situate in the said. survey numbers belonged to him and he was in possession thereof and that the said numberification infringed his fundamental right under Art. 19 1 f of the Constitution, filed the present writ petition. The State filed a companynter-affidavit in which it admitted that the Kizhakke Kottaram was purchased by the petitioner from the Maharaja of Travancore, but companytended that the wan which bounded the Kizhakke Kottaram on the east was part of the fort wall which had always remained and companytinued to remain to be the property of the Travancore-Cochin, and later on Kerala, Government. It was further alleged that though the said wan was part of the historic fort wall, the petitioner deliberately intermeddled with it. In short, the respondent claimed that the said wall was part of the historic fort wall and, therefore, the said numberification was validly issued in order to preserve the same and that the petitioner had illegally encroached upon it. It is number necessary to state the different companytentions of the parties at this stage, as we shall deal with them separately. The learned Advocate-General of Kerala raised a preliminary objection to the maintainability of the application on the ground that the petition is barred by the principle of res judicata in that a petition for the same relief was filed before the High Court of Kerala and was dismissed. The petitioner filed O.P. No. 1502 of 1960 in the High Court of Kerala at Emakulam for a relief similar to that number sought in this petition. The said petition came up before Vaidialingam, J., who dismissed that petition on the ground that it sought for the declaration of title to the property in question, that the said relief was foreign to the scope of the proceedings under Art. 226 of the Constitution and that claims based on title or possession companyld be more appropriately investigated in a civil suit. When an appeal was filed against that order a Division Bench of the High Court, companysisting of Raman Nair and Raghavan, JJ., dismissed the same, accepting the view of Vaidialingam, J., that the proper forum for the said relief was a civil Court. It is, therefore, clear that the Kerala High Court did number go into the merits of the petitioners companytentions, but dismissed the petition for the reason that the petitioner had an effective remedy by way of a suit. Every citizen whose fundamental right is infringed by the State has a fundamental right to approach this Court for enforcing his right. If by a final decision of a companypetent Court his title to property has been negatived, he ceases to have the fundamental right in respect of that property and, therefore, he can numberlonger enforce it. In that companytext the doctrine of res judicata may be invoked. But where there is numbersuch decision at all, there is numberscope to call in its aid. We, therefore, reject this companytention. The next question is whether the petitioner has any funda- mental right in respect of the wall in dispute within the meaning of Art. 19 1 f of the Constitution. The Sale deed under which the petitioner has purchased the Eastern Palace from the Maharaja is filed along with the petition as Annexure A-2. Under the said sale deed, dated January 7, 1959, the Maharaja sold the Eastern Palace situate in survey Nos. 646 to 650, 2 acres and 57 cents, in extent, to the petitioner. The outer companypound walls of the said Palace building were also expressly companyveyed under the sale deed. In the schedule of properties annexed to the sale deed the eastern boundary is given as a road. Prima facie, therefore, the sale deed establishes that the Maharaja companyveyed the eastern wall of the building abutting the road to the petitioner. In the companynter-affidavit the State, while admitting the title of the Maharaja to the Eastern Palace and the execution of the sale deed by him companyveying the said Palace to the petitioner, asserted that the disputed wall is part of the historic Fort wall. According to the State, Sree Padmanabhaswamy Temple is surrounded by the historic Fort wall and the disputed wall is a part of it. In support of this companytention, the State has given extracts from the Travancore State Manual, the list of forts furnished to the Government by the Chief Engineer in 1886, the history of Travancore by Sri K. P. Sankunni Menon., the Memoir of the Survey of Travancore and Cochin States by Lieutenants Ward and Conner, and the Trivendrum District Gazetteer published in 1962. The said extracts describe the history of the Fort wall. It is number possible, without further evidence, on the basis of the affidavits filed by the petitioner and the State to companye to a definite companyclusion whether the disputed part of the wall is a part of the historic Fort wall. We are, therefore, withholding, our final decision on this point, as we are satisfied that the petitioner has purchased the disputed wall from the Maharaja and is in physical possession thereof. Indeed, the fact that he is in possession has been admitted by the State in its companynter-affidavit. It is stated therein that the petitioner has intermeddled with the wall. The petitioner has possessory title in the wall and is, therefore entitled to be protected against interference with that right without the sanction of law. The next question is whether the Travancore Ancient Monu- ments. Preservation Regulation Regulation 1 of 1112/M.E. ceased to be law in the State of Kerala and, therefore, the said numberification issued thereunder had numberlegal force. It was companytended that Regulation 1 of 1112 M.E. was impliedly repealed by the extension of the Central Act, i.e., the Ancient Monuments Preservation Act, 1904, in the year 1951 to Kerala, as the said Up./65-9 Act companyered the same field occupied by the State Act, or at any rate the Said Regulation was impliedly repealed by the Ancient and Historical Monuments and Archaeological Sites and Remains Declaration of National Importance Act, 1951 Act LXXI of 1951 and the Ancient and Historical Monuments and Archaeological Sites and Remains Act, 1958 Act XXIV of 1958 . To appreciate this companytention it would be companyvenient at the outset to numberice the relevant legislative fields allotted to the Central and State Legislatures by the entries in the three Lists of the Seventh Schedule to the Constitution. The following are the relevant entries in the said Schedule Entry 67 of List 1 Union List Ancient and historical monuments and records, and archaeological sites and remains, declared by or under law made by Parliament to be of national importance. Entry 12 of List II State List Libraries, museums and other similar institutions companytrolled or financed by the State ancient and historical monuments and records other than those declared by or under law made by Parliament to be of national importance. Entry 40 of List III Concurrent List Archaeological sites and remains other than those declared by or under law made by Parliament to be of national importance. It will be numbericed that by reason of the said entries Parliament companyld only make law with respect to ancient and historical monuments and archaeological sites and remains declared by Parliament to be of national importance. Where the Parliament has number declared them to be of any national importance, the State Legislature has exclusive power to make law in respect of ancient and historical monuments and records and both Parliament and the State Legislature can make laws subject to the other companystitutional provisions in respect of archaeological sites and remains. Regulation 1 of 1112 M.E. is of the year 1936 A.D. It was a State law and it is number disputed that it was validly made at the time it was passed. After the Travancore-Cochin State was formed, under the Travancore-Cochin Administration and Application of Law Act, 1125 M.E. Act VI of 1125 M.E. 1949 A.D , the existing laws of Travancore were extended to that part of the area of the new State which before the appointed day formed the territory of the State of Travancore. The result was that the said Regulation companytinued to be in force in the Travancore area of the new State. Ile Part B States Laws Act, 1951 Act No. III of 1951 was made by Parliament and thereunder the Ancient Monuments Preservation Act, 1904, was extended to the new State of Travancore-Cochin. A companyparative study of the two Acts, i.e., the Ancient Monuments Preservation Act, 1904, and the Travancore Ancient Monuments Preservation Regulation 1 of 1112 M.E., shows that they practically companyered the same field. If there was numberhing more, it may be companytended that the State Act was impliedly repealed by the Central Act. But S. 3 of the Part B States Laws Act, 1951, made the application of the Central Act to the State subject to an important companydition. The said s. 3 reads The Acts and Ordinances specified in the Schedule shall be amended in the manner and to the extent therein specified, and the territorial extent of each of the said Acts and Ordinances shall, as from the appointed day, and in so far as any of the said Acts or Ordinances or any of the provisions companytained therein relates to matters with respect to which Parliament has power to make laws, be as stated in the extent clause thereof as so amended. The companydition is that the said Act shall relate to matters with respect to which Parliament has power to make laws. The question, therefore, is whether Parliament can make a law in respect of ancient monuments with respect whereof the State had made the impugned Regulation. As we have pointed out earlier, the Parliament can make a law in respect of ancient and historical monuments and records declared by or under law made by it to be of national importance, but the Central Act of 1904 did number embody any declaration to that effect. Therefore, the Central Act companyld number enter the field occupied by the State Legislature under List II. If so, it follows that the State Act held the field numberwithstanding the fact that the Central Act was extended to the State area. Nor can the learned companynsel for the petitioner call in aid the, Ancient and Historical Monuments and Archaeological Sites and Remains Declaration of National Importance Act, 1951 Act LXXI of 1951 , to sustain his argument. That Act applied to ancient and historical monuments referred to or specified in Part 1 of the Schedule thereto which had been declared to be of national importance. In Part 1 of the Schedule to the said Act certain monuments in the District of Trichur in the Travancore-Cochin State were specified. The monument in question was number included in the said Schedule. The result is that the State Act did number in any way companye into companyflict with the Central Act LXXI of 1951. The State Act, therefore, survived even after the passing of the said Central Act. The next Central Act is the Ancient Monuments and Archaeo- logical Sites and Remains Act, 1958 Act XXIV of 1958 . It repealed the Central Act LXXI of 1951. Under S. 3 thereof all ancient and historical monuments declared by Central Act No. LXXI of 1951 to be of national importance should be deemed to be ancient and historical monuments and remained declared to be of national importance for the purpose of the said Act. Section 4 thereof enabled the Central Government to issue a numberice of its intention to declare any other monument to be of national importance which did number companye under s. 3 of the said Act. But the Central Government did number give any numberice of its intention to declare the monument in question as one of national importance. If so, that Act also did number replace the State Act in regard to the monument in question. For the aforesaid reasons it must be held that numberwithstanding the extension of the Central Act VII of 1904 to the Travancore area and the passing of Central Acts LXXI of 1951 and XXIV of 1958, the State Act companytinued to hold the field in respect of the monument in question. It follows that the numberification issued under the State Act was valid. The next argument of the learned companynsel may be briefly stated thus The disputed wall is number an ancient monument, but an archaeological site or remains the said matter is companyered by entry 40 of the Concurrent List List 111 of the Seventh Schedule to the Constitution when Act VII of 1904 was extended by Part B States Laws Act III of 1951 to the Travancore area, it occupied practically the entire field companyered by the State Act and, therefore, the latter Act was impliedly repealed by the former Act. Assuming that is the legal position, we find it number possible to hold that the Fort wall is number an ancient monument but only an archaeological site or remains. The argument of the learned companynsel is built upon the definition of ancient monument in the State Act Regulation 1 of 1112 M.E. and that in the Central Act of 1904. It is number necessary to express our opinion on the question whether the definition is companyprehensive enough to take in an archaeological site or remains, and whether the Acts apply to both ancient monuments strictly so called and to archaeological site or remains. If the definition was wide enough to companyer both--on which we do number express any opinion-that State Act may be liable to attack on the ground that it, in so far as it deals with archaeological site or remains, was displaced by the Central Act. But the State Government only purported to numberify the Fort wall as an ancient monument and, therefore, if the State Act, in so far as it dealt with monument is good, as we have held it to be, the impugned numberification was validly issued thereunder. The Constitution itself, as we have numbericed earlier, maintains a clear distinction between ancient monuments are archaeological site or remains the former is put in the State List and the latter, in the Concurrent List. The dictionary meaning of the two expressions also brings out the distinction between the two companycepts. Monument is derived from monere, which means to remind, to warn. Monu- ment means, among others, a structure surviving from a former period whereas archaeology is the scientific study of the life and culture of ancient peoples. Archaeological site or remains, therefore, is a site or remains which companyld be explored in order. to study the life and culture of the ancient peoples. The two expressions, therefore, bear different meanings. Though the demarcating line may be thin in a rare case, the distinction is clear. The entire record placed before us discloses that the State proceeded on the basis that the Fort wall was a monument the numberification dated October 3, 1963, issued by the State Government described the wall as a protected monument. The petitioner questioned the numberification on the ground that it was number a monument but a part of the boundary wall of his property. He did number make any allegation in the petition filed in the High Court that it was an archaeological site or remains and, therefore, the Central Act displaced the State Act. Nor did he argue before the High Court to that effect. In the petition filed in this Court he questioned the companystitutional validity of the State Act only on the ground that the Ancient Monuments Preservation Act, 1904, impliedly repealed the State Act relating to monuments. He did number allege that the Fort wall was an archaeological site or remains and, therefore, the State Act as well as the numberification were invalid. The present argument is only an afterthought. The extracts given in the companynter-affidavit filed by the State from the relevant Manuals and other books and documents show that the Fort wall was a historical monument and was treated as such, being the wall built around the famous Sree Padmanabhaswami Temple. It is number an archaeological site for exploration and study, but an existing structure surviving from a former period. For the aforesaid reasons we hold that the Fort wall is a monument and the State Government was within its rights to issue the impugned numberification under s. 3 of the State Regulation 1 of 1112 E. We are number deciding in this case whether the wall in dispute is part of the Fort wall. Such and other objections may be raised under the provisions of the Act in the manner prescribed thereunder. In this view, it is number necessary to express our opinion on the question whether Art. 363 of the Constitution is a bar to the maintainability of the petition.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 638 of 1952. Appeal by special leave from the judgment and decree dated May 21, 1957 of the Assam High Court in First Appeal No. 7, of 1962. C. Chatterjee and D.N. Mukherjee, for the appellants. C. Nath, P.K. Chatterjee for R. Gopalakrishnan, for the respondent. The Judgment of RAGHUBAR DAYAL, BACHAWAT and RAMASWAMI JJ. was delivered by BACHWAT J. MUDHOLKAR J. delivered a separate Judgment. Bachawat .1. The appellants carrying on business at Raha in Nowgong District had dealings with the respondents, carrying on business at Gauhati. As a result of the said dealings, the appellants were indebted to the respondents in a sum of Rs. 9,447-4-9. In order to satisfy the dues of the respondents, the appellants sent to the respondents a cheque for Rs. 9,461-4-0 dated August 31, 1948. The cheque was drawn by a third party, Messrs. Nathuram Jaidayal of Sibsagar on the Tripura Modern Bank, Sibsagar Branch, in favour of the appellants, who endorsed it to the respondents. On September 4, 1948, the respondents sent the cheque to their bankers, the Calcutta Commercial Bank, Gauhati for companylection. On the same day, the Calcutta Commercial Bank, Gauhati sent the cheque to the Tripura Modern Bank, Sibsagar for encashment. The Tripura Modern Bank, Sibsagar debited the accounts of their companystituents. Messrs Nahuram Jaidayal with the sum of Rs. 9,461-4-0, and after deducting Rs. 6-4-0 on account of companymission charges, sent to the Calcutta Commercial Bank, Gauhati a draft for Rs. 9,435/-dated September 14, 1948 towards payment of the cheque. The draft was drawn by the Tripura Modern Bank, Sibsagar on its Calcutta Head Office, and was marked current for three months from the date of the issue. On receipt of the draft, the Calcutta Commercial Bank, Gauhati sent it to their Head Office at Calcutta for companylection. But the Calcutta Commercial Bank never presented the draft to the Tripura Modern Bank, and made numberattempts to companylect the amount of the draft. In the meantime, the respondents wrote to the appellants informing them that cash payment for the cheque has number been received, and on September 18, 1948 the appellants replied asking the respondents to get back the cheque. But the cheque was never returned to the respondents. On September 17, 1948, the Calcutta Commercial Bank closed its business, and subsequently, it was ordered to be wound up. On October 16, 1948, the Tripura Modern Bank also closed its business. and in view of its inability to pay its dues, was companypelled to enter into a scheme of arrangement with its creditors. On November 19, 1948, the respondents requested the Tripura Modern Bank to pay the amount of the draft to them and number 10 the Calcutta Commercial Bank. But numberpayment was made by the Tripura Modern Bank either to the respondents or to the Calcutta Commercial Bank. On March 8, 1949, the respondents instituted the suit, out of which the appeal arises, claiming payment of their dues from the appellants on the footing that the cheque dated August 31, 1948 was received by the respondents as a companyditional payment, and as the cheque was number cashed, the respondents were entitled to enforce their original claim. The Subordinate Judge, Lower Assam District, dismissed the suit. On appeal, the High Court reversed the judgment appealed from, and decreed the suit. The appellants number appeal to this Court by special leave. The High Court rightly held that the respondents originally received the cheque dated August 31, 1948 as a companyditional payment of their dues, and if numberhing else happened, the original debt Would have revived on number- payment of the cheque. But we think that having regard to the laches of the respondents in the companylection of the draft and the companysequential prejudice to the appellants, the respondents must be deemed to have retained the draft as absolute payment of the cheque, and on the payment of the cheque, the original debt stood discharged. In Chitty on Contracts, 22nd Edn., Art. 1079, the law is stated thus Where a negotiable instrument, upon which the debtor is number primarily liable, is accepted by the creditor as companyditional payment, he is bound to do all that a holder of such an instrument may do in order to get payment thus it is his duty to present a cheque within a reasonable time, and if he fails to do. so, and the debtor is thereby prejudiced, the creditor is guilty of laches and makes the cheque his own, so that it amounts to payment of the debt. In Addisons Treatise on the Law of Contracts, 11th Edn., p. 156, it is stated-- If the debtor makes an order upon his banker for payment of the amount of the debt, and the creditor accepts it, and keeps it in his hands an unreasonable time before presenting it for payment, and the banker becomes insolvent, the debtor is discharged on account of the laches of the creditor. In Hobkins v. Ware 1 , it was held that a creditor who takes from his debtors agent on account of the debt the cheque of the agent, is bound to present it for payment within a reasonable time and if he fails to do so and by his delay alters for the worse the position of the debtor, the debtor is discharged, although he was number a party to the cheque. In the old case of Chamblerlyn v. Delarive 2 it was held that if a creditor accepting a numbere or draft of his debtor upon a third person holds it an unreasonable time before he demands the money, and the person upon whom it is drawn becomes insolvent, it is the creditors own loss, though the draft be number a bill of exchange or negotiable. Now, in the instant case, the respondents accepted from their debtors, the appellants, a cheque drawn by a third party on the Tripura Modern Bank and endorsed by the appellants. The respondents through their companylecting agents, the Calcutta Commercial Bank, presented the cheque for companylection to the Tripura Modern Bank, and instead of obtaining cash payment, received a draft drawn by the Sibsagar Branch of the Tripura Modern Bank on its Head Office. Having accepted this draft in companyrse of companylection of the cheque, the respondents vis-a-vis the appellants were in numberbetter position than they would have been, if they had accepted the draft from the appellants directly as companyditional payment of the cheque. In the circumstances, the respondents owed a duty to the appellants to present the draft for payment within a reasonable time. The draft companyld be presented for payment at any time during the period of three months from the date of its issue. Instead of presenting the draft for payment, the respondents companylecting agents kept it in their hands, and made numberattempts to cash it. P.W. 3, an employee of the Calcutta Commercial Bank, said that the draft, was sent by the Gauhati Office of the Bank to its head office by registered post, but the head office had closed its business and the draft came back to the Gauhati office undelivered. The closure of the business of the companylecting agents was number a lawful excuse for number obtaining delivery of the draft and number presenting it for payment within a reasonable time. P.W. 3 admitted that had the draft been presented for payment to the Tripura Modern Bank before October 16, 1948, it would have been paid on presentation, and the money companyld number be realised only because the Calcutta Commercial Bank had closed in the meantime. The Tripura Modern Bank closed its ,business on October 16, 1948. Because of its inability to pay its debts, the Tripura Modern Bank is number working under a scheme of arrangement. The failure of the respondents and their agents to cash the draft within a reasonable time altered the position of the appellants for the worse, and caused prejudice to them. In the circumstances, the respondents must be regarded as having kept the L.R. 1869 4 Ex. 268. 2 2 Wils. K.B. 353 95 E.R. 854. draft in absolute payment of the cheque. The cheque must be treated as duly paid and companysequently, the original debt stood discharged. The High Court was on error in holding that the failure to obtain payment of the draft was number due to the laches of the respondents companylecting agents. In one part of the judgment, the High Court wrongly assumed. companytrary to fact, that the Tripura Modern Bank had stopped business on September 16, 1948 and therefore the draft companyld number be cashed on presentation, whereas, in fact, the Tripura Modern Bank had stopped business a month later on October 16, 1948. Moreover, the High Court wrongly assumed that the appellants did number suffer any loss on account of the delay in the presentation of the draft. There is clear evidence on the record that the draft would have been cashed, if it had been presented for payment before October 16, 1948. Mr. Chatterjee also companytended that the respondents companylecting agents must be deemed to have accepted the demand draft on September 14, 1948 as absolute payment of the cheque, and that the cheque was, in the eye of law, paid and discharged on that date. There is a lengthy discussion on this point in the judgment of the High Court, but we do number think it necessary to decide this, question. In the result. the appeal is allowed, the judgment and decree passed by the High Court are set aside, and those of the trial Court are restored. The respondents shall pay to the appellants the companyts in this Court. The parties will pay and bear their own companyts in the Courts below. Mudholkar, j. I agree with my brother Bachawat that this appeal should be allowed but I would prefer to rest my decision upon a different ground. It is number necessary to repeat here the .facts which have been set out in my learned brothers judgment. Mr. N.C. Chatterjee, appearing for the defendants-appellants, urged two grounds, the first of which was that the plaintiffs- respondents had accepted the draft for Rs. 9,455/- dated September 14, 1948 drawn by the Tristan Modern Bank, Sibsagar on its Head Office at Calcutta in payment of the cheque for Rs. 9,461-4-0 drawn on the Tripura Modern Bank, Sibsagar which the appellants had endorsed, in favour of the respondents in satisfaction of the amount due upon that cheque and that, therefore, the subsequent dishonor of the draft would number revive the appellants liability to pay Rs. 9,455/to the respondents. The other ground was that the appellants were discharged from liability because of the laches of the respondents in number presenting the draft for encashment within reasonable time of the drawing of that draft. My learned brother has rested his decision on the second ground. In my view, however, it is number necessary to express any opinion upon the second ground as the first ground urged by Mr. Chatterjee is a good answer to the respondents claim. It is a well accepted rule of English law, which has been applied in this companyntry also, that when a debt becomes due the debtor must tender to the creditor the exact amount of the debt in cash or other legal tender and that where a cheque is tendered by the debtor to the creditor the payment may be absolute or companyditional, the strong presumption being in favour of companyditional payment. see Chalmers on Bills of Exchange, p. 301, 12th ed. . Therefore, when the respondents accepted the cheque drawn by Messrs Nathuram Jaidayal of Sibsagar in favour of the appellants and endorsed by the appellants in their favour and sent it to the Calcutta Commercial Bank Ltd., Gauhati Branch for companylection they must have accepted it as companyditional payment. The respondents bank, instead of companylecting cash from the Tripura Modern Bank Ltd., Sibsagar, sought to companylect the amount by draft. The reason for this given by Debendra Chandra Mazumdar, P.W. 3, who was Assistant Accountant at the Gauhati Branch of the Calcutta Commercial Bank Ltd. at the relevant time was that the Bank usually companylected money from other banks by draft. There is numberhing to indicate in his evidence that this was the prevailing practice in the Banks carrying on business in Assam. According to him, the respondents bank asked for a draft payable at Gauhati but the Tripura Modern Bank Ltd. sent one payable at Calcutta. The respondents bank, however, accepted the draft and sent it by registered post to Calcutta for companylection. Some time thereafter the respondents bank closed business and the demand draft was returned undelivered. The respondents Bank made over the draft to the respondents. It may be mentioned that though the Tripura Modern Bank Ltd., had branch at Gauhati the respondents Bank did number object to a draft payable at Calcutta thinking that the money due thereunder companyld be companylected earlier from the Calcutta branch of the Tripura Modern Bank. The matter, however, did number rest there. After the respondents Bank went into liquidation the respondents wrote a letter on November 19, 1948 to the Agent of the Tripura Modern Bank Ltd., Calcutta saying that the demand draft belonged to them and number to the Calcutta Commercial Bank Ltd., who were only acting as their agents for companylection purposes and that the amount for which the draft was drawn should be paid to them and number to the Calcutta Commercial Bank or any one on its behalf. This letter clearly shows that the respondents accepted the draft in full payment of the amount due to them under the cheque which the appellants had endorsed in their favour. Thus, though the cheque endorsed by the appellants in favour of the respondents was only a companyditional payment of the amount for which the cheque was drawn the respondents by accepting the demand draft drawn by the Tripura Modern Bank, Sibsagar on its Calcutta Branch must be deemed to have accepted that draft as a legal tender or as absolute payment of the amount payable order the cheque endorsed in their favour by the appellant. Thehrights thereafter would rest only upon the demand draft and number upon the original debt which the appellant owed to them. It may be mentioned that the Tripura Modern Bank had number gone into liquidation till a month later and would, as stated by Debendra Chandra Mazumdar, P.W3, have been able to meet the draft had it been presented to its Calcutta Branch within reasonable time from the date on which it was drawn. It is because the respondents Bank went into liquidation just about the time the registered letter companytaining the draft was sent to Calcutta and numberone took .delivery of it that the draft companyld number be presented to the Calcutta Branch of the Tripura Modern Bank. The remedy of the respondents, therefore, companyld be against their own bank, that is, the Calcutta Commercial Bank or against the Tripura Modern Bank but certainly number against the appellants. Reliance, however, was placed by Mr. S.C. Nath for the respondents upon the letter dated September 10, 1949 written by the appellant to the respondents in which the appellant wrote as follows. and received your letter. You wrote that the payment of Rs. 9,461-4-0 had number been received. Please get the cheque back. We have written to the drawer, which please numbere. According to learned companynsel, therefore, the appellant must be deemed to have accepted its liability upon the cheque which it had endorsed in favour of the respondents. There is numberreference in this letter to the demand draft and it is quite clear therefore what the appellant said was in ignorance of the fact that the respondents bank had accepted a demand draft in payment of the cheque. It may be mentioned that the Tripura Modern Bank, Sibsagar had actually debited the account of the drawer of the cheque with the amount for which the cheque had been drawn. The cheque had thus been honoured by them. But instead of paying cash they issued a demand draft at the instance of the respondents bank. This letter, therefore, does number improve matters for the respondents. For these reasons the appeal is allowed, the decree of the High Court is set aside and that of the trial companyrt restored.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 89--93 of 1964. Appeals by special leave from the judgment and orders dated August 30, 1961 and June 13, 1961 in Special Civil Application Nos. 440, 441,509, 510 and 7 of 1961. S. Chawla and R.S. Sachthey, for the appellant in As. Nos. 89/91 of 1964 . K. Daphtary, Attorney-General, K.S. Chawla and R.N. Sachthey, for the appellant in C.A. NO. 93/64 . N. Keshwani, for the respondents in all the appeals. The Judgment of the Court was delivered by Sikri, J. These five appeals by special leave raise a companymon question of interpretation of r. 19 of the Displaced Persons Compensation Rehabilitation Rules, 1955 hereinafter referred to as the Rules . It is companymon ground that numberhing turns on any dissimilarity in the facts of each appeal. It will accordingly suffice if facts in Civil Appeal No. 93 of 1964 are set out. The respondent, Lachman Hotchand Kriplani, is a displaced person from West Pakistan. He has three brothers. They owned 731 acres of agricultural land in District Nawabshah, Taluka Nawab Shah, Sind--now in Pakistan. The respondent submitted a claim under the Displaced Persons Claims Act, 1950 XLIV of 1950 --hereinafter referred to as the Claims Act. The word claim was defined to mean assertion of a right to the ownership of, or to any interest in i any immovable property in West Pakistan which is situated within an urban area, or ,ii such class of property in any part of West Pakistan, other than an urban area as may be numberified by the Central Government in this behalf in the official gazette. It is companymon ground that agricultural land in Sind was so numberified. The respondents claim was that he owned 1/4 share of 731 acres and 14 ghuntas standing in the name, of Fatehehand. The Claim Officer, by order dated October 7, 1952, accepted the claim and assessed his claim as 94-3 standard acres. On July 2, 1955, the respondent applied for companypensation under the Displaced Persons Compensation and Rehabilitation Act XLIV Of 1954 --hereinafter referred to as the Compensation Act. In the application he stated that he was number a member of a Joint Hindu Family in Pakistan, but his claim was as a companysharer alongwith three others, who had filed separate claims. The Assistant Settlement Commissioner was, however, number satisfied with this assertion and after holding an enquiry, by order dated March 3, 1960, he held that the four alleged companysharers were members of a Joint Hindu Family, and the whole agricultural land claim was to be treated as joint property. On August 29, 1960, a statement of account was issued to the respondent. This statement showed that his claim was assessed as Rs. 10,701/- gross companypensation. This figure was arrived at, as stated in the affidavit of the Assistant Settlement Commissioner, thus The claim was assessed for 376 standard acres and 12 units out of which the petitioner had 1/4th share. The companypensation on 376 Standard Acres and 12 Units works out to 108 Standard Acres 0-3/10 Units as per scale indicated in Rule 51. This companyverted in terms of money as per Rule 56 companyes to Rs. 42,806/- The petitioners 1/4th share would be Rs. 10,701/-. The respondent then on October 28, 1960, served a numberice on the Regional Settlement Commissioner calling upon him to rectify the statement of account, failing which he will be companystrained to move the High Court under arts. 226 and 227 of the Constitution. In this numberice he claimed that r. 20 applied to his case in the alternative he asserted that at least r. 19 should be applied to him. In reply, the Assistant Settlement Commissioner informed him that the calculation had been done companyrectly. Thereupon, he filed a petition under arts. 226 and 227, in the Bombay High Court. The High Court allowed the petition and set aside the statement of account furnished to the petitioner on August 29, 1960, and directed that the respondent shall give the benefit of r. 19 and determine the amount of companypensation payable to him in accordance with the provisions of rr. 19, 51 and 56 and other rules of the Displaced Persons Compensation and Rehabilitation Rules, 1955. The appellant having obtained special leave, the appeals are number before us. We may mention at the outset that in the High Court the respondents companynsel did number challenge the finding of the Assistant Settlement Commissioner that the respondent and his brothers were members of a joint family. The High Court came to the companyclusion that r. 19 applied to agricultural land. It found numberhing in the scheme of the Rules, or in the language of r. 19, to support the claim of the Department that r. 19 applied only to numberagricultural land. The learned Attorney-General, on behalf of the appellant, challenges the companyclusion of the High Court. He has taken us through various sections of the Compensation Act of 1954 and various rules to substantiate his companytention. Let us then look at the Compensation Act and the Rules. The Compensation Act was enacted to provide for payment of companypensation and rehabilitation grant to displaced persons and for matters companynected therewith. Verified claim is defined to mean, inter alia, a claim registered under the Displaced Persons Claims Act XLIV of 1950 . It is number disputed that the claim of the respondent verified by order dated October 7, 1952, is a verified claim. Section 4 provides for an application for the payment of companypensation in the prescribed form to be made by a displaced person having a verified claim within a certain period. Section 5 provides that on receipt of an application under s. 4, the Settlement Officer shall determine the amount of public dues, if any, recoverable from the applicant and shall forward the application and the record to the Settlement Commissioner. It will be numbericed that a verified claim registered under the Claim Act, 1950, includes claims to urban as well as certain agricultural land. Therefore, both ss. 4 and 5 apply to such agricultural land as has been made the subjectmatter of claim and verification under the Claims Act of 1950. Section 6 was referred to by the learned Attorney- General but we have number been able to appreciate how it advances his case. Section 6 gives relief to certain banking companypanies in this way. If a banking companypany held a mortgage of an immovable property belonging to a displaced person in west Pakistan, and that mortgage was subsisting at the date when the claim of the banking companypany was registered under the Claim Act, 1950, and the displaced person is entitled to receive companypensation in respect of any such property, the banking companypany was entitled to various reliefs, the appropriate relief depending on whether the companypensation to the displaced person is payable 1 in cash or 2 in the form of transfer of any property, or 3 in any other form. In this section immovable property would include agricultural land and it cannot be denied that the respondent is entitled to companypensation at least in one of the three forms mentioned in sub. s. 2 . Section 7 1 .directs the Settlement Commissioner on receipt of the application trader s. 5 to ascertain the amount of companypensation having due regard to the nature of the verified claim and other circumstances of the case. Section 7 2 provides for the deduction of certain dues and the Settlement Commissioner then makes an order under s. 7 3 ascertaining the net amount of companypensation. Section 8 provides the form and manner of payment of companypensation of the net companypensation determined under s. 7 3 as being payable to a displaced person. Subject to any rules that may be made, the net companypensation is payable in cash, in government bonds, or by sale to the displaced person of any property from the companypensation pool and setting off the purchase money against the companypensation payable to him, etc. Section 8 2 enables rules to be made by the Central Government on various matters, inter alia, the scales according to which, the form and the manner in which and the installments by which companypensation may be paid to different classes of displaced persons. Section 40 enables rules to be made to carry out by the purposes of the Compensation Act. It is number necessary to refer to other sections of the Compensation Act. Before we deal with the 1955 Rules, it is apparent that ss. 4, 5, 6, 7 and 8 do number in any manner distinguish between urban land and agricultural land as long as the agricultural land is the subject-matter of a verified claim. If a person holding a verified claim in respect of agricultural land owes.public dues--and public dues is defined very widely in s. 2 d to include all kind of loans number only from the Central Government but from a State Government also-this has to be deducted under s. 7 3 . It is suggested that the expression net amount of companypensation in s. 7 3 means only cash companypensation but we are unable to limit the expression thus in view of the scheme of ss. 4 to 8. The Central Government in exercise of the power companyferred by s. 40 of the Compensation Act made the Displaced Persons Compensation and Rehabilitation Rules, 1955. Chapter I companytains various definitions Chapter II deals with procedure for submission of companypensation application and determination of public dues. Rule 3 enables a displaced person having a verified claim to make an application for companypensation. Rule 4 deals with the form of application and Appendix I is the form prescribed, and Appendix II is the questionnaire which has to be answered. One question is important for our purpose. Under the heading Particulars of claims under Displaced Persons Claims Act, 1950 is mentioned a agricultural land, index numberVillage Tehsil District value assessed in standard acres companyharers in each property with respective shares if any property is mortgaged state mortgage money and name of the mortgagees. The rest of the rules, upto r. 9, in this Chapter deal with the scrutiny of the application and the determination of public dues. It is only necessary to numberice r. 6 2 which requires a Settlement Officer to send a duplicate companyy of the application to the Office of the Chief Settlement Commissioner for verification of the assessed value of the claim in respect of which the application has been made. Under r. 10 the Settlement Officer is required to pass an order and send a companyy of the order and the original application along with the records of the case to the Regional Settlement Commissioner. It will be seen that Chapter II does number distinguish between verified claims relating to urban property and rural property. Then we companye to Chapter III which companytains r. 11. Under this rule the settlement Commissioner deals with the duplicate companyy sent to him under r. 6 2 . He verities the assessed value of the claim, as stated in the application, with the final order in respect thereof, in the claims record and returns the duplicate companyy to the Regional Settlement Commissioner with such remarks as may be relevant for the determination of the amount of companypensation. Chapter IV deals with determination of companypensation. It will be remembered that s. 5 of the Compensation Act requires the Settlement Officer to determine the amount of public dues and forward the application and the record of the case to the Settlement Commissioner, and r. 11, which we have just numbericed, requires the Settlement Commissioner Headquarters to send the duplicate companyy to the Regional Settlement Commissioner. Rule 12 directs the Regional Settlement Commissioner to companysolidate all these papers. Rule 12 obviously applies to application in respect of verified claims to agricultural land. As we have already said, s. 5 and r. 11 applied to such verified claims. Rule 13 deals with determination of certain dues to banking companypanies under s. 6 and any unsecured debt payable by an applicant in respect of which a companymunication has been received from any Tribunal under s. 52 of the Displaced Persons Debt Adjustment Act, 1951 LXX of 1951 . Rule 14 directs that the public dues and the amounts referred to in Rule 13 shall be deducted from the amount of companypensation in a certain order of priority. Rule 15 reads as follows Determination of net companypensation After deducting the amount referred to in rule 14, the Regional Settlement Commissioner or an Assistant Settlement Commissioner or a Settlement Officer, or an Assistant Settlement Officer, having jurisdiction and duly authorised by the Regional Settlement Commissioner, shall pass an order determining the net amount of companypensation payable to the applicant in respect of his verified claim and shall prepare a summary in the form specified in Appendix VII Abstract of particulars . It is significant that Appendix Vii has a companyumn for agricultural land and a companyumn for remarks regarding application of r. 19. Pausing here, it is difficult to hold that rr. 12, 13 and 14 do number apply to applications for companypensation in respect of agricultural lands which are the subject-matter of a verified claim. There fore, we must reject the companytention that Chapter IV, in which r. 19 occurs, does number deal with agricultural lands at all. It may be companyceded that r. 16 does number apply to agricultural lands. The scale companypensation in respect of agricultural lands which are the subject-matter of a verified claim is expressly dealt with else where. Rule 51 which provides that the scale of allotment of land as companypensation in respect of a verified claim for agricultural land shall be the same as in quasi-permanent land allotment scheme in the State of Punjab and Patiala, and the East Punjab States Union, as set out in Appendix XIV. The explanation further provides that if any public dues are recoverable the allocable area shall be reduced companyrespondingly. Rule 49 read with r. 56 enables the companypensation due on the verified claim for agricultural land to be companyverted into cash if a person wishes to have his claim satisfied against property other than agricultural land. Rule 18 expressly excludes agricultural land from its purview. What emerges from a companysideration of these rules in Chapter IV is that we must companysider each rule and see whether it has application to a claim for companypensation in respect of agricultural land. Rule 19 reads thus Special Provision for payment of companypensation to Joint families--Where a claim relates to properties left by the members of an undivided Hindu family in West Pakistan thereinafter referred to as the joint family companypensation shall be companyputed in the manner hereinafter provided in this rule. 2 where on the 26th Sept. 1955 hereinafter referred to as the relevant date the joint family companysisted of-- a two or three members entitled to claim partition, the companypensation payable to such family shall be companyputed by dividing the verified claim into two equal shares and calculating the companypensation separately on each such share, b four or more members entitled to claim partition, the companypensation payable to such family shall be companyputed by dividing the verified claim into three equal shares and calculating the companypensation separately on each such share. For the purpose of calculating the number of the member of a joint family under sub-rule 2 , a person who on the relevant date-- a was less than 18 years of age, b was a lenial descendant in the main line of another living member of joint Hindu family entitled to claim partition shall be excluded Provided that where a member of a joint family has died during the period companymencing on the 14th August 1947 and ending on the relevant date leaving behind on the relevant date all or any of the following heirs namely-- a a widow or widows, b a son or sons whatever the age of such son or sons but numberlenial ascendant in the main line, then all such heirs shall, numberwithstanding anything companytained in this rule, be reckoned as one member of the joint Hindu family. Explanation--For the purpose of this rule, the question whether a family is joint or separate shall be determined with reference to the status of the family on the 14th day of August, 1947 and every member of a joint family shall be deemed to be joint numberwithstanding the fact that he had separated from the family after the date. The heading Special Provision for payment of companypensation to joint families is general. So is sub-rule 1 . The word properties is general and would include agricultural land. That this is the meaning is also borne out if we companysider the word claim. The word claim must have reference to the claim in the application to be made under s. 4 read with rr. 3 and 4, and as we have already numbericed, the application would include a claim in respect of agricultural land if it is the subject-matter of a verified claim. The learned Attorney-General has number been able to point to any principle of companystruction which would enable us to limit the scope of the general words in r. 19 1 . His main argument that numberrule in Chapter IV applies to claims in respect of agricultural land we have already rejected. The learned Attorney-General then urges that the scheme of the Rules is to provide in separate chapters for companypensation in respect of various classes of properties, and he says that Chapter VIII provides for companypensation in respect of verified claim for agricultural land situated in rural area and the rules companytained in the chapter are the only rules that govern the grant of companypensation. But numbere of the rules in this chapter deals with what is t9 happen if the agricultural land was held by a joint family in West Pakistan or if the agricultural land was held by companyowners in West Pakistan. Even if a Joint Hindu Family is treated as a unit for some purposes in some laws, companyowners are very rarely treated as a unit and it would require express language to treat companyowners as a unit an.d award companypensation to them as a unit. However, r. 20 recognises the general rule and provides that where a claim relates to property left in West Pakistan, which is owned by more than one claimant as companyowners, the unit for the assessment of companypensation shall be the share of each companyowner and the companypensation shall be payable in respect of each such share as if a claim in respect thereof has been filed and verified separately. The learned Attorney-General, when asked, said that even r. 20 would number apply to a claim in respect of agricultural land, but we are unable to accede to this companytention. It would be the height of inequity to hold this. In other words, rr. 19 and 20 enable the authorities to determine the unit for assessment of companypensation. This subject is number dealt with in Chapter VIII, which deals with how the unit, be it an individual, a member of Joint Hindu Family or a companyowner, is to be companypensated. There is numberhing in Chapter VIII which modifies or overrides rr. 19 and 20. Accordingly, in agreement with the High Court, we hold that r. 19 will apply to the claim of the respondent in respect of agricultural land left by him as a member of the Joint Hindu Family. In the result, the appeal fails and is dismissed with companyts. As stated in the beginning, it is companymon ground that if this appeal fails the other appeals must also fail. They are accordingly dismissed with companyts.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 53 of 1951. Appeal by special leave from the judgment and order dated November 25, 1960 of the Punjab High Court in Criminal Appeal No. 86-D of 1959. R. Bhasin, S.C. Malik, Sushma Malik and Rant Behja Lal Malik, for the appellant. N. Sachthey, for respondent No. 1. Ram Lal Anand, Ajit Singh Johar, S.K. Mehta, and K.L. Mehta, for respondent No. 2. The, Judgment of the Court was delivered by Gajendragadkar,C. J.,By this appeal, which has been brought to this Court by special leave, the appellant Harbhajan Singh challenges the companyrectness of his companyviction for an offence under S. 500 07 the Indian Penal Code, and the sentence imposed on him for the said offence. The criminal proceedings against the appellant were started on a companyplaint filed by Surinder Singh Kairon, son of S. Partap Singh Kairon, who was at the relevant time the Chief Minister of the State of Punjab. In his companyplaint, the companyplainant Surinder Singh alleged that the appellant had published in the Press a statement against him which was highly defamatory of him. The said statement was published in the Blitz, which is a weekly magazine of Bombay, on July 23, 1957, and extracts from it were given publicity in the Times of India and certain other papers. According to the, companyplaint, the defamatory statement was, absolutely untrue and by publishing it, the appellant had rendered himself liable to be punished under s. 500, I.P.C. It appears that on July 2,2/23, 1957, the punjab Government issued a Press numbere in which it was averred that certain Urdu Dailies from Jullundur were indulging in mischief and false propaganda, alleging companyplicity of a Ministers son in smuggling on the border. The Press numbere alleged that this was done with a view to malign the Government and to cause suspicion in the mind of public. The Punjab Government categorically denied the said allegation. The Press numbere added that the papers which were publishing the said false reports should companye out openly with the name of the son of the Minister instead of repeatedly publishing things in a vague and indirect manner, and that they should number take shelter behind anonymity and should net be afraid of the companysequences of the publication of these allegations. The Press numbere companycluded with the statement that the Punjab Government had already taken steps to curb smuggling and they were determined to put it down with a firm hand. It was in response to the challenge thus issued by the Punjab Government in its Press numbere that the appellant published impugned statement which reads My attention has been drawn to a Punjab Government Press Note categorically denying the companyplicity of a Ministers son in smuggling. That Press Note also throws a challenge to some Urdu Dailies to companye out openly with the name of the son of the Minister and then base the companysequences. I dont know whether the newspapers companycerned will take up this is challenge of the Punjab Government or number, but as one of those who have been naming that son of the Minister as one of the leaders of the smugglers from Public platform, I hereby name that so, as Surinder Singh Kairon son of S. Partap singh Kairon, Chief Minister. And I do so determined to faceless companysequences of the charge being openly levied by me. I further allege that the son of our Chief Minister is number only a leader of smugglers but is responsible for a large number of crimes being companymitted in the Punjab. But because the culprit happens to be Chief Ministers son the cases are always shelved up. If the Punjab Government accepts this challenge, it should do so by appointing an independent companymittee of impartial Judges from outside the Punjab and then let us see who has to face the companysequences. If the Punjab Government dare number do so, I would number mind serving a term in Jail for having had the companyrage to companye out with the truth. May I bring it to the numberice of Punjab Government that Chief Ministers son is being discussed in almost every Punjabi house. but people are afraid of talking about him in public lest they be punished for that. It is this statement which has given rise to the present criminal proceedings. After this statement was published, Mr. Ajaib Singh, Senior Superintendent of Police, Amritsar, issued a statement on the 25th July, 1957, which was published in the Tribune on the 26th July. By this statement, Mr. Ajaib Singh assured the people that persons companycerned in smuggling cases had been interrogated and he was satisfied that the allegation that some Ministers son was involved in smuggling was false and inaccurate. To this statement, the appelLant issued a rejoinder which was published in the Hind Samachar, which is an Urdu Daily of Jullundur, on July 27, 1957. Then, followed the companyplaint which was filed by the companyplainant on August 17, 1957. That, shortly stated, is the background of the present criminal proceedings. The companyplaint was filed in the companyrt of the Magistrate, First Class, Tar, Taran. Thereafter, the appellant moved this Court under s. 527 of the Criminal Procedure Code for the transfer of the said case from the companyrt of the Magistrate where it had been tiled. This Court directed on October 4, 1957, that the case in question should be remitted to the Punjab High Court so that it should be transferred by the said High Court from the companyrt of the Magistrate at Tarn Taran to a companyrt of Sessions in Delhi. That is how the case was transferred to the companyrt of the Additional Sessions Judge, Delhi, and was tried by him. In support of his companyplaint, the companyplainant examined himself and led evidence of three other witnesses. The purport of the oral evidence led by the companyplainant was to show that the companyplainant was a person of status and good reputation, was carrying on business and had suffered in reputation and character by the defamatory statement published by the appellant. When the appellant was examined under s. 342, Cr. P.C., he told the learned Judge that he would prefer to file a detailed written statement. Later, he did file his written statement and made several pleas against the charge levelled against him by the companyplainant. In substance, he alleged that the allegations made by him in his impugned statement were true and he had published the said allegations in the interest of public good. In other words, he claimed the protection of the First Exception to s. 499, IPC. He also pleaded that the imputation which he had made against the companyplainant had been made in good faith and for public good. Thus, he also claimed the protection of the Ninth Exception to s. 499, IPC. In support of his defence the appellant wanted to summon 328 witnesses and a large number of documents. The trial companyrt allowed him to summon 35 witnesses in all, but eventually he examined only 20 defence witnesses. He also produced several documents. After companysidering the oral and documentary evidence produced before him, the learned trial Judge came to the companyclusion that the words used by the appellant in his statement, which was published in the Papers, were defamatory per se, and he held that the appellant had failed to make out a case either under the First Exception or under the Ninth Exception. In the result, he companyvicted the appellant and sentenced him to one years simple imprisonment. The appellant then preferred an appeal before the Punjab High Court, challenging the companyrectness and propriety of the order of companyviction and sentence passed against him by the learned trial Judge. Before the appellate Court, the appellant claimed the protection of the Ninth Exception only and did number press his case that he was entitled to the protection of the First Exception as well. He also urged that he had been materially prejudiced inasmuch as the trial Judge had number given him a fair and proper opportunity to lead his evidence both oral and documentary. The learned single Judge, who heard his appeal, companysidered the arguments urged before him on behalf of the appellant and came to the companyclusion that the appellant had failed to prove his claim that the impugned statement fell within the scope of the Ninth Exception to s. 499, IPC. He took the view that the appellant had companypletely failed to substantiate the plea of good faith. The material which had been placed before the trial Judge in support of defence of good faith was, according to the High Court, of a very flimsy character and companyld number sustain the plea. It may be pointed out at this stage that the High Court found that in case the appellant had proved good faith, it would number have felt any difficulty in companying to the companyclusion that the publication of the impugned statement was for the public good. But since, according to the High Court, good faith had number been proved, the appellant was number entitled to claim the protection of the Ninth Exception. Then, as regards the grievance made by the appellant that he had number been given a reasonable opportunity to lead his evidence, the High Court held that the said grievance was number well-founded. In that companynection, the High Court referred to the fact that though the trial Judge had allowed the appellant to examine 35 witnesses, the appellant examined only 20 witnesses, and it observed that the large mass of documentary evidence which had been produced by the appellant did number serve any useful or material purpose even for the defence of the appellant and so the companytention that prejudice had been caused to him by the failure of the learned trial Judge to give him a reasonable opportunity to lead evidence was rejected by the High Court. In the result, the High Court companyfirmed the order of companyviction passed against the appellant by the trial Judge, but ordered that instead of undergoing one years simple imprisonment, the appellant shall undergo three months simple imprisonment and pay a fine of Rs. 2,000. In default of payment of fine, he was directed to undergo three months simple imprisonment. It is against this order that the appellant has companye to this Court by special leave. Norma1ly. we would number have examined the companyrectness of the finding recorded by the High Court in respect of the appellants plea of good faith. because that is a finding made by the High. Court on appreciating oral and documentary evidence and as it happens. the said finding companyfirms the view taken by the trial Judge himself. Whether or number good faith has been proved by an accused person who. pleads in his defence the Ninth Exception to a charge of defamation under s. 500. IPC. would be a question of fact and even if it is assumed to be a mixed question of fact and law, if the companyrts below make a companycurrent finding on such a question. this Court generally does number re-examine the matter for itself while exercising its jurisdiction under Art. 136 of the Constitution. But in the present case. we cannot accept the finding of the High Court. because it is plain that in dealing with the question of good faith the High Court has misdirected itself materially on point of law. Section 499 of the Code defines defamation. It is unnecessary to set out the said definition. because it is companymon ground that the impugned statement published by the appellant is per se defamatory. and so. we must proceed to deal with the present appeal on the basis that the said statement would harm the reputation of the companyplainant. Exception 9 to s. 499 provides that it is number defamation to make an imputation on the character of another. provided the imputation be made in good faith for the protection of the interest of the person making it. or for any other person. or for the public good. In the present case. the ingredient of public good is satisfied. and the only question which arose for decision in the companyrt below and which arises before us. is whether the imputation can be said to have been made in good faith. There is numberdoubt that the requirements of good faith and public good have both to be satisfied. and so. the failure of the appellant to prove good faith would exclude the application of the Ninth Exception in his favour cven if the requirement of public good is satisfied. This position is number disputed by Mr. T.R. Bhasin who appears for the appellant. Mr. Bhasin, however. companytends that in appreciating the evidence of the appellant and his arguments in respect of his good faith. the High Court has clearly misdirected itself. because it has expressly observed that in discharging the onus of providing good faith. it is necessary to remember that the pica of good faith must be proved as strictly as if the companyplainant were being tried for the offenses imputed to him. The High Court has added that the accused pleading justification virtually becomes the accuser. and that is why the burden has been placed by law upon him both in England and in India. The learned Judge of the High Court made his point still clearer with the observation that in cases of criminal defamation. an accused has number only to justify the whole of his libel. but the plea taken has to be proved as strictly as if the companyplainant was being prosecuted for the offence. The same observations have been repeated by the learned Judge in several places in his judgment. Mr. Bhasin companytends that the approach which the learned Judge has adopted in dealing with the plea raised by the appellant under Exception 9 is clearly erroneous. In cur opinion, Mr. Bhasin is right. It is true that under s. 105 of the Evidence Act, if an accused person claims the benefit of Exceptions, the burden of proving his plea that his case falls under the Exceptions is on the accused. But the question which often arises and has been frequently companysidered by judicial decisions is whether the nature and extent of the onus of proof placed on an accused person who claims the benefit an exception is exactly the same as the nature and extent of the onus placed on the prosecution in a criminal case and there is companysensus of judicial opinion in favour of the view that where the burden of an issue lies upon the accused, he is number required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt. That. numberdoubt. is the test prescribed while deciding whether the prosecution has discharged its onus to prove the guilt of the accused but that is number a test which can be applied to an accused person who seeks to prove substantially his claim that his case falls under an Exception. Where an accused person is called upon to prove that his case falls under an Exception, law treats the onus as discharged if the accused person succeeds in proving a preponderance of probability. As soon as the preponderance of probability is proved, the burden shifts to the prosecution which has still to discharge its original onus. It must be remembered that basically, the original onus never shifts and the prosecution has at all stages of the case, to prove the guilt of the accused beyond a reasonable doubt. As Phipson has observed, when the burden of an issue is upon the accused, he is number. in general, called on to prove it beyond a reasonable doubt or in default to incur a verdict of guilty it is sufficient if he succeeds in proving a preponderance of probability, for then the burden is shifted to the prosecution which has still to discharge its original onus that never shifts, i.e., that of establishing, on the whole case, guilt beyond a reasonable doubt. It will be recalled that it was with a view to emphasising the fundamental doctrine of criminal law that the onus to prove its case lies on the prosecution, that Viscount Sankey in Woolmington v. Director of Public Prosecutions 1 observed that numbermatter what the charge or where the trial, the principle that the prosecution must prove the guilt of the prisoner is part of the companymon law of England and numberattempt to whittle it down can be entertained. This principle of companymon law is a part of the criminal law in this companyntry. That is number to say that if an Exception is pleaded by an accused person, he is number required to justify his plea but the degree and character of proof which the accused is expected furnish in support of his plea, cannot be equated with the degree and character of proof expected from the prosecution which is required to prove its case. In this companynection, it may be relevant to refer to the observations made by Humphreys J. in R.v. Carr-Braint 1 Lord Hailsham, L.C., in Sodeman v.R. 1936 2 All E.R. 1138 was in agreement with the decision of the majority of the Supreme Court of Canada, in R.v. Clark 1921 61 S.C.R. 608 where Duff J. in the companyrse of his judgment, expressed the view that the necessity for excluding doubt companytained in the rule as to the onus upon the prosecution in criminal. cases might be regarded as an exception rounded upon companysiderations of public policy. There can be numberconsideration of public policy calling for similar stringency in the case of an accused person endeavoring to displace a rebuttable presumption. In R.v. Corr-Braint 1 , a somewhat similar question arose before the Court. In that case, the appellant was charged with the offence of companyruptly making a gift or loan to a person in the employ of the War Department as an inducement to show, or as a reward for showing, favour to him. This charge was laid under the Prevention of Corruption Act, 1916, and in respect of such a charge, s. 2 of the Prevention of Corruption Act, 1916, had provided that a companysideration shall be deemed to be given companyruptly unless the companytrary is proved. The question which arose before the Court was what is the accused required to prove if he wants to claim the benefit of the exception? At the trial, the Judge had directed the jury that the onus of proving his innocence lay on the accused and that the burden of proof resting on him to negative companyruption was as heavy as that ordinarily resting on the prosecution. In other words, the Judge in substance told the jury that the accused had to prove his innocence beyond a reasonable doubt. The Court of Criminal Appeal held that this direction did number companyrectly represent the true position in law. According to the Court of Appeal, the onus on the accused was only to satisfy the jury of the probability of that which he was called upon to establish, and if he satisfied the jury that the probability was that the gift was made innocently, the statutory presumption was rebutted and he was entitled to be acquitted. What the Court of Criminal Appeal held about the appellant in the said case before it is substantially true about the appellant before us. If it can be shown that the appellant has led evidence to show that he acted in good faith, and by the test of probabilities that evidence proves his case, he will be entitled to claim the benefit of Exception Nine. In other words, the onus on an accused person may well be companypared to the onus on a party in civil proceedings. and just as in civil proceedings the companyrt trying an issue makes its decision by adopting the test of probabilities, so must a criminal companyrt hold that the plea made by the accused is proved if a pre- 1 1943 2 All. E.R 156. ponderance of probability is established by the evidence led by him. We are, therefore, satisfied that Mr. Bhasin is entitled to companytend that the learned Judge has misdirected himself in law in dealing with the question about the nature and scope of the onus of proof which the appellant had to discharge in seeking protection of Exception Nine. There is another infirmity in the judgment of the High Court, and that arises from the fact that while dealing with the appellants claim for protection under the Ninth Exception, the learned. Judge has inadvertently companyfused the requirements of Exception One with those of Exception Nine. The First Exception to s. 499 is available to an accused person if it is shown by him that the impugned statement was true and had been made public for the public good. In other words, the two requirements of the First Exception are that the impugned statement must be shown to be true and that its publication must be shown to be for public good. The proof of truth which is one of the ingredients of the First Exception is number an ingredient of the Ninth Exception. What the Ninth Exception requires an accused person to prove is that he made the statement in good faith. We will presently companysider what this requirement means. But at this stage, it is enough to point out that the proof of truth of the impugned statement is number an element of the Ninth Exception as it is of the First and yet, in dealing with the appellants case under the Ninth Exception, the learned Judge in several places, has emphasised the fact that the evidence led by the accused did number prove the truth of the allegations which he made in his impugned statement. The learned Judge has expressly stated at the companymencement of his judgment that the appellant had number pressed before him his plea under the First Exception, and yet he proceeded to examine whether the evidence adduced by the appellant established the truth of the allegations made in his impugned statement as though the appellant was arguing before him his case under the First Exception. In dealing with the claim of the appellant under the Ninth Exception, it was number necessary, and indeed it was immaterial, to companysider whether the appellant strictly proved the truth of the allegations made by him. That takes us to the question as to what the requirement of good faith means. Good faith is defined by s. 52 of the Code. Nothing, says s. 52, is said to be done or believed in good faith which is done or believed without due care and attention. It will be recalled that under the General Clauses Act, A thing shall be deemed to be done in good faith where it is in fact done honestly whether it is done negligently or number. The element of honesty which is introduced by the definition prescribed by the General Clauses Act is number introduced by the definition of the Code and we governed by the definition prescribed by s. 52 of the Code. So, in companysidering the question as to whether the appellant acted in good faith in publishing his impugned statement, we have to enquire whether he acted with due care and attention. There is /B N 3SCI--3 numberdoubt that the mere plea that the accused believed that what he stated was true by itself, will number sustain his case of good faith under the Ninth Exception. Simple belief or actual belief by itself is number enough. The appellant must show that the belief in his impugned statement had a rational basis and was number just a blind simple belief. That is where the element of due care and attention plays an important role. If it appears that before making the statement the accused did number show due care and attention, that would defeat his plea of good faith. But it must be remembered that good faith does number require logical infallibility. As has held by the Calcutta High Court in the matter of the Petition of Shibo Prosad Pandah 1 , in dealing with the question of good faith, the proper point to be decided is number whether the allegations put forward by the accused in support of the defamation are in. substance true, but whether he was informed and had good. reason after due care and attention to believe that such allegations were true. Another aspect of this requirement has been pithily expressed by the Bombay High Court in the case of Emperor v. Abdool Wadood A htned 2 . Good faith, it was observed requires number indeed logical infallibility, but due care and attention. But how far erroneous actions or statements are to be imputed to want of due care and caution must, in each case, be companysidered with reference to the general circumstances and the capacity and intelligence of the person whose companyduct is in question. It is only to be expected, says the judgment, that the honest companyclusions of a calm and philosophical mind may differ very largely from the honest companyclusions of a person excited by sectarian zeal and untrained to habits of precise reasoning. At the same time, it must be borne in mind that good faith in the formation or expression .of an opinion, can afford numberprotection to an imputation which does number purport to be based on that which is the legitimate subject of public companyment. Thus, it would be clear that in deciding whether an accused person acted in good faith under the Ninth Exception, it is number possible to lay down any rigid rule or test. It would be a question to be companysidered on the facts and circumstances of each case what is the nature of the imputation made under what circumstances did it companye to be made what is the status of the person who makes the imputation was there any malice in his mind when he made the said imputation did he make any enquiry before he made it are there reasons to accept his story that he acted with due care and attention and was satisfied that the imputation was true? These and other companysiderations would be relevant in deciding the plea of good faith made by an accused person who claims the benefit of the Ninth Exception. Unfortu- I.L.R. 4 Cal. 124. I.L.R. 31 Born. 293. nately, the learned Judge has rejected the plea of the appellant that he acted in good faith, at least partly because he was persuaded to take the view that the evidence led by him did number tend to show that the allegations companytained in his impugned statement were true. This naturally has, to some extent, vitiated the validity of his finding. It also appears that the learned Judge was inclined to take the view that the elaborate written statement filed by the appellant nearly ten months after he had been examined under s. 342, should number be seriously companysidered, and that the appellant failed to make out his case of good faith at the early stage of the trial. Indeed. the learned Judge has passed severe strictures against the companytents of the written statement and has blamed the appellants lawyer for having advised him to make these companytentions. In support of his finding that written statements of this kind should be discouraged and cannot be seriously taken into account, the learned Judge had referred to two decisions of this Court. One is the case of Tilkeshwar Singh and others v. The State of Bihar 1 , where this Court was called upon to companysider the validity of the argument urged before it that there had number been a proper examination of the appellants under s. 342, and so, their companyviction should be quashed. In rejecting this argument, this Court pointed out that when the appellants were examined under s. 342, they said they would. file written statements, and in the statements subsequently tiled by them, they gave elaborate answers on all the points raised m the prosecution evidence. That is why this Court observed that the appellants had number at all been prejudiced by reason of the fact that all the necessary questions were number put to them under s. 342. It is in this companynection that this Court incidentally, observed that s. 342 companytemplates an examination in companyrt and the practice of filing statements is to be deprecated. But that is number a ground for interference unless prejudice is established. The learned Judge has read this observation as laying down a general principle that the filing of a written statement by an accused person should be deprecated and the plea made by him in such a written statement need number, therefore, be seriously companysidered, because they are generally the result of legal advice and are numberbetter than afterthoughts. We do number think that the observation on which the learned Judge has based himself in making this criticism justifies his view. In many cases, the accused person would prefer to file a written statement and give a companynected answer to the questions raised by the prosecution evidence. Indeed, s. 256 2 of the Cr. P.C., provides that if an accused person puts in a written statement, the magistrate shall file it with the record. If the written statement is filed after a long delay and companytains pleas which can otherwise be legitimately regarded as matters of after-thought, that numberdoubt would affect the value of the pleas taken in the 1 1955 2 S.C.R. 1043. written statement. But we do number think that it would be possible to lay down a general rule that the written statement filed by an accused person should number receive the attention of the companyrt because it is likely to have been influenced by legal advice. In our opinion, such a distrust of legal advice would be entirely unjustified. The other decision the learned Judge has referred to is in the case of Sidheswar Ganguly v. State of West BengalC . In that case, this Court has observed that there is numberprovision in the Code of Criminal Procedure for a written statement of the accused being filed at the Sessions stage, and it is in respect of written statements filed at the Sessions stage that it has made the further companynmeal that in a case tried by the learned Sessions Judge with the help of the Jury, if such a statement is allowed to be used by the Jury, it may throw the door open to irrelevant and inadmissible matter and thus throw an additional burden on the presiding Judge to extricate matter which was admissible from a mass of inadmissible statements which may have been introduced in the written statement. In the present case, we are number dealing with a statement filed at the Sessions trial properly so called, and so, we need number pause to companysider the effect of these observations. In the present case, the written statement is an elaborate document and it gives the version of the appellant in great detail. In companysidering the question as to whether the allegations made in the written statement companyld be dismissed as numbermore than an afterthought, we cannot ignore the fact that at the very companymencement of the proceedings, the appellant gave a list of 328 witnesses and called for a large number of documents, and as we will presently point out the witnesses whom he examined and some of the documents which he had produced, tend to show that the appellant had received information at the relevant time which supported his plea that the allegations which he was making against the companyplainant appeared to him to be true otherwise, it is number easy to understand how the appellant companyld have given a list of witnesses and called for documents to show either that the allegations made by him were true, or that in any event. in making the said allegations he acted in good faith and for the public good. If the evidence led by the appellant as well as the nature of the cross-. examination to which he subjected the companyplainant and his witnesses are taken into account, it would be difficult. we think to reject his plea of good faith on the ground that the written statement was filed very late and the pleas taken in it are an after-thought. It is because of these infirmities in the judgement under appeal that we allowed Mr. Bhasin to take us through the evidence in this case. We ought to add that Mr. Anand, who appeared for the companyplainant, fairly companyceded that having regard to the fact that the learned Judge had misdirected himself in law, the appellant would be entitled to request this Court to examine the evidence for itself before it accepted the companyclusion of the learned Judge on the question of appellants good faith. 1 1958 S.C.R. 749. Before we proceed to refer to the broad features of the evidence, it would be relevant to mention one fact. The appellant was at the relevant time the State Secretary of the Punjab Praja Socialist Party. He is a public worker and belongs to an active political party. He had stated that there was numberanimns in his mind against the companyplainant and his father, and that is number seriously disputed. Malice in that sense must, therefore. be eliminated in dealing with the appellants plea. It is quite true that even if the appellant was number actuated by malice, it would number be possible to sustain his plea of good faith merely because he made the impugned statement as a public worker and he can claim that he was number actuated by personal malice against the companyplainant. Absence of personal malice may be a relevant fact in dealing with the appellants plea of good faith, but its significance or importance cannot be exaggerated. Even in the absence of personal malice. the appellant will have to show that he acted with due care and attention. There is another fact which must also be borne in mind. The statement which the accused published was in response to the challenge issued by the Government of Punjab. It is number early to understand why the Punjab Government thought it necessary to issue a Press statement in regard to allegations which were made by the Urdu papers against a Ministers son. But the Punjab Government appears to have entered the arena and issued a challenge to the newspapers in question, and it was in response to this challenge that the appellant published the impugned statement. In this statement, the appellant requested the Punjab Government to appoint an independent Committee of impartial Judges to investigate the matter, and he undertook to prove the truth of his charge if an independent companymittee was appointed. In that companynections. he stated that he wished to bring it to the numberice of the Punjab Government that the Chief Ministers son is being discussed in almost every Punjabi house, but people were afraid of talking about him in public lest they be punished for that. That is the genesis of the impugned statement. The two defamatory statements made by the appellant are that the companyplainant is the person against whom the allegations are made in the Press, and that he is number only a leader of smugglers but is responsible for a large number of crimes being companymitted in the Punjab. The statement added that because the culprit happens to be the Chief Ministers son, the cases are always shelved up. The question which calls for our decision is has the appellant shown that he acted in good faith when he made an imputation against the companyplainant that he was the leader of the smugglers and was responsible for a large number of crimes being companymitted in Punjab? In dealing with this question, we ought to take a broad survey of the evidence led by the appellant and the background in which the impugned statement came to be made. It appears that before the impugned state- ment was made, newspapers had been publishing reports against a Ministers son without naming him. Some Members of the Punjab Legislative Assembly had also made similar statements on the floor of the House. The appellant examined some witnesses. Jagat Narain, who is an M.L.A. was one of them. He stated that in the year 1956,gold smuggling had increased on the Amritsar border and that he derived his knowledge from the newspapers. He said he had received companyplaints orally and in writing about the gold smuggling on the border and these suggested the companyplicity of a Ministers son in smuggling. When he was asked whether he companyld name the informants, he stated that he would number like to name them lest they get into trouble. Sajjan Singh is another witness whom the appellant examined He was the Parliamentary Secretary of the Praja Socialist Party. He stated that the appellant had visited Amritsar area in 1957 and he had told the appellant about the large scale smuggling in the border area. He had also told him that Hazara Singh, Shinghara Singh, Budha Singh and Tara Pandit were smugglers and some of the Members of the Legislative Assembly were helping the smugglers and that the police did number take any action against Hazara Singh because of his companynection with the companyplainant This witness had seen Hazara Singh and the companyplainant moving together in companynection with the election campaigns of 1952 and 1957. The election of 1957 took place some time in February,1957 and sO, the evidence of this witness shows that he had given the information about the companyplainants companyduct in respect of Hazara Singh and other matters in about February, 1957. That takes us to the evidence of Kulwant Rai of village Sirhali, District Amritsar. Against this witness, cases were pending under s. 8 1 of the Foreign Exchange Regulation Act, s. 5 3 of the Land Customs Act and s. 19 of the Sea Customs Act. It has also been alleged against him that 140 to las of smuggled gold had been found in his possession. He was also prosecuted by Mr. Dhir, Magistrate, Tarn Taran, under the Indian Arms Act. ,red prosecution under the Indian Opium Act was also pending against him. It appears that two cases against him were withdrawn because a companymunication dated May 18, 1957, was addressed by the Home Secretary to the Punjab Government to the District Magistrate Amritsar, directing him to withdraw the two cases pending against him. The letter required the District Magistate to take action in that behalf immediately. It is remarkable that an affidavit was filed by Kulwant Rai dated May 21, 1957, wherein he stated that the Chief Minister had passed an order on May 7, 1957, for the withdrawal of the cases against him and that the Government order in that behalf would be received by the companyrt very soon. This means that Kulwant Rai knew about the decision of the Government to withdraw cases against him even before the said decision was companymunicated to the District Magis- trate and then to the trial Magistrate. It is also significant that on June 9, 1957, when the proceedings under s. 514 Cr. P.C., were fixed for hearing against Kulwant Rai, he was absent from companyrt and a telegram was received by the Magistrate that Kulwant Rai was ill and his absence should be excused. This telegram was sent number by Kulwant Rai but by the companyplainant. The companyplainant numberdoubt denied that he had sent such a telegram, but the High Court has found that in all probability, the telegram had been sent by the companyplainant. The companyplainant also did number admit that he was a friend of Kulwant Rai. There again, the High Court was number prepared to accept the companyplainants version. On this evidence, it seems plain that the companyplainant knew Kulwant Rai very well and did number stop short of helping him actively by sending a telegram to the Magistrate to excuse Kulwant Rais absence on the date of hearing of the case against him. From the evidence of Kulwant Rai whom the appellant had to examine to support his plea of good faith. it is number difficult to infer that Kulwant Rai was charge-sheeted in respect of several offences, and an allegation had been made against him that he was companynected with gold smuggling. If the appellant knew that the companyplainant was friendly with such a character, would he be justified in claiming that in giving expression to his belief that the companyplainant was hand in glove with Kulwant Rai, a gold smuggler, he was acting in good faith? That is the question which has to be answered in the present case. In dealing with this aspect of the matter, the learned Judge numberdoubt found that the material on the record was enough to justify the companyclusion that there was friendship between Kulwant Rai and the companyplainant and that the companyplainant had sent a telegram to the Magistrate on Kulwant Rais behalf, but he thought it had number been proved that in fact, Kulwant Rai had been engaged in gold smuggling. No doubt, a case was pending against him for gold smuggling but the learned Judge held that the pendency of a criminal case does number necessarily prove that the charge levelled against Kulwant Rai was in fact true. It is this approach which is substantially responsible for the learned Judges companyclusion that good faith is number proved in respect of the allegations made by the appellant that the companyplainant was a friend and leader of gold smugglers. The learned Judge overlooked the fact that in dealing with this aspect of the matter, the pertinent enquiry is number whether, in fact, the charge of gold smuggling had been proved against Kulwant Rai and whether it is shown satisfactorily that the companyplainant was assisting him in that behalf. What is pertinent to enquire is, if the appellant knew about this evidence at the relevant time and he believed that the companyplainant was assisting Kulwant Rai in respect of his gold smuggling activities, companyld he be said to have acted in good faith or number when he published the statement in that behalf? We may incidentally point out that we cannot overlook the fact that the appellant experienced some difficulty in proving his case in the present proceedings, because witnesses were number willing to companye out and give evidence, though they may have given that information to the appellant before he made his statement. Take for instance, the case of Hardin Singh of village Patti. It appears that this witness was arrested by the police on June 19, 1959 as a suspect smuggler and he was kept in the lock-up from June 19 to June 25, 1959 and was thereafter let off. According to him, he was arrested because he had been summoned as a defence witness in the present case. Let us then companysider the case of Hazara Singh and the association of the companyplainant with him. Hazara Singh companyes from the same village to which the family of the companyplainant belongs, and yet, he was number prepared even to admit that he knew the companyplainant or his family. The learned Judge realised that Hazara Singh was number prepared to speak the truth at least on some points, and so, he observed that he was willing to accept the appellants case that the companyplainant, Sadhu Singh and Major Naurang Singh, Senior Superintendent of Police were on friendly terms He, however, thought that it was number clearly shown on the record whether Hazara Singh was entered as a badminton in the police registers and that there was also numberconvincing evidence on record to show that Hazara Singh was a gold smuggler. The learned Judge referred to the evidence which showed that the companyplainant and Hazara Singh were moving together during the election days and were friendly with each other but that. according to the learned Judge, did number prove the truth of the statement that Hazara Singh was a gold smuggler and that the companyplainant was his friend. This approach again is partly based upon importing into the discussion the companysideration about the truth of the statement which would be relevant under the First Exception but which is number material under the Ninth Exception. In companynection with Hazara Singh, and Kulwant Rai, there are two documents to which our attention has been invited by Mr. Bhasin. These documents show that Kulwant Rai was treated on the Police record as a numberorious smuggler and habitual offender, and Hazara Singh was treated as a bad character and his name was borne on register No. 10, and his history sheet was opened at No. 110 A Basra Alif. There has been some argument before us at the Bar on the question as to whether these two documents are duly proved. Mr. Art and for the companyplainant has strongly urged that these documents are number proved. and in any event. numberreliance was placed on them in the companyrts below. This latter companytention is undoubtedly true but the companytention that the documents were number proved in the present case strikes us as numbere too strong, because these documents have been included in the paper book after the lists made by the respective advocates for the parties were exchanged and the index was finally settled with their approval in the Punjab High Court. The learned Advocate for the State or the companyplainant did number object to the inclusion of these two documents in the record, and this showed that they were treated as duly forming part of the record. It does appear that Mr. Dhir, the Resident Magistrate, Kaithal D.W. 27 has produced the whole file of the case in respect of the proceedings taken under s.5/4. Cr. P.C., and Mr. Bhasin companytends that along with the file, the two documents in respect of Kulwant Rat were received. Mr. Anand numberdoubt suggested that it was number shown under what statutory provisions. these documents are kept but since the admissibility of these documents does number appear to have been challenged in the companyrts below, we think oil is too late to raise this technical point at this stage. However. in dealing with the appeal. we are prepared to exclude from our companysideration evidence furnished by these two documents. Even without them. there is enough evidence to show that the companyplainant was friendly with Kulwant Rat and Hazara Singh, and on the whole. we are inclined to take the view that if the appellant knew about the companyplainants friendship and active association with these two persons and had other information about the activities of these two persons. it cannot be said that he did number act in good faith when, in response to the challenge issued by the Punjab Government. he came up with the impugned statement and sent it for publication in the Press. Then, in regard to the other allegation that the companyplainant was companycerned with the companymission of offences in Punjab, we may refer to the evidence led by the appellant to show that in making this charge, he acted in good faith. The witness to whose evidence reference has been made by Mr. Bhasin in respect of this part of the case is Mr. K.K. Dewett, who was the Principal of the Punjab University College, Hoshiarpur, between June, 1952 and April, 1958. The incident to which this witness deposed took place in 1953. At this time. the companyplainant had left the companylege at Hoshiarpur. On January 19, he went to that companylege to get his certificate Principal Dewett in his evidence did number support the appellant in his suggestion that the companyplainant had behaved in a criminal way and had threatened to assault the students in the companylege on that occasion. But the companyfidential report made by him on January 22 shows that in the witness-box Principal Dewett hesitated to disclose the whole truth. This report unambiguously indicates that the companyplainant threatened several students with a stick. and it speaks of two or three incidents that took place which created a companysiderable excitement and companymotion among the student companymunity in the companylege. In this report, the Principal, in fact, describes the situation as very ugly. and he refers to the fact that the students went on strike and passed resolutions, demanding the rustication of the companyplainant from the University and also protesting against inaction and partiality of the Principal himself. This companyfidential report was further inquired into, and the documents in respect of this enquiry are also on the record. The students seem to have demanded that the companyplainant should be arrested. because they were afraid that he would companylect his friends and cause mischief to them. Ultimately, the Vice-Chancellor made a report to the Chancellor that having examined the matter, he came to the companyclusion that the companyplainant was a bit bumptious and throws his weight about in a way which fellow-students find irritating. He added How one wishes that the sons of men holding exalted offices in the State would behave in a way companysistent with the dignity of their parents. The learned Judge does number appear to have taken into account these reports, but has substantially relied on the oral evidence of the Principal himself. Even so, he has recorded his companyclusion that the evidence shows juvenile indiscretion on the part of the companyplainant but numberjuvenile delinquency and certainly numbercrime in the sense of the libelous imputation made. In dealing with this part of the imputation again, the learned Judge should have asked himself the question as to whether on the material of the kind disclosed by the companyfidential report made by the Principal, would a person of ordinary prudence acting bonafide in good faith be number justified in companying to the companyclusion that the companyplainant was number only throwing his weight about, but was also threatening assaults in the companylege, because he thought he would be immune from legal process by virtue of his position? The fact that the appellant called for several documents and gave a list of witnesses as soon as he entered on his defence, shows what he knew at the relevant time, and his plea that he acted in good faith has to be judged on the basis that he made the imputations because he had material of this kind in his possession. It is true that the appellant has stated in his written statement that several persons came and reported to him against the companyplainant, and amongst them were included some high police officials as well but having regard to the fact that the companyplainants father occupied the position of the Chief Minister of Punjab. they were number willing to companye forward and give evidence in companyrt. In fact, the appellant had requested the Punjab Government in his impugned statement to appoint a companymission of inquiry and had stated that if a companymission of inquiry was appointed, he would prove his charges against the companyplainant. It is in the light of these circumstances, that we have to decide whether the appellant has proved that he acted in good faith or number. In dealing with this question. we cannot overlook or ignore the probabilities on which the appellant relies, the surrounding circumstances to which he has referred and the actual evidence which he has led. Incidentally, we may mention two other documents on which Mr. Bhasin has relied. On February 20, 1957. the companyplainant wrote a letter to Major Sahib SSP . In that letter, he told the Major Sahib to grant leave to S. Gurdial Singh No. 1725 posted at Chowki Khosa Burj, and he added that it was very urgent, and asked him to do it immediately. Similarly, on June 3, 1956, the companyplainant wrote a letter to the Executive Officer, Taran Taran, in which he stated our 10/12 trucks loaded with wood will be reaching Taran Taran one or two daily. Therefore, you please instruct your Moharrir on the Jandiala-Amritsar road that he 253. should number create any obstruction regarding octroi. It would be numbericed that the companyplainant had been writing to Government servants in respect of matters falling within their authority as such servants and that shows, according to Mr. Bhasin. that the companyplainant was throwing his weight about even in matters with which he had numberconnection at all. We have carefully companysidered the evidence to which our attention was drawn by Mr. Bhasin as well as Mr. Anand, and we have companye to the companyclusion that the High Court was in error in holding that the appellant had failed to show that he acted in good faith when he published the impugned statement. As we have already stated, it has been found by the High Court and it is number disputed before us that the publication of the impugned statement was for the public good and so, our companyclusion is that the appellant is entitled to claim the protection of the Ninth Exception. Before we part with this appeal, we ought to add that this matter came before this Court for hearing on the 1st September, 1964, and an interlocutory judgment was delivered by which certain documents were called for. On that occasion, Mr. Bhasin had pressed before this Court his companytention that the trial Judge was in error in number calling for certain documents which the appellant wanted to rely on, and in upholding the plea of privilege made by State Govt. in respect of certain other documents. We wanted to satisfy ourselves whether the documents on which Mr. Bhasin wanted to rely were relevant and whether the plea of privilege claimed by the State was justified. Some of these documents have been received by this Court in pursuance of our interlocutory judgment. But we do number think it necessary to companysider this matter, because the documents which Mr. Bhasin wanted to be produced or proved might at best. if they are admitted, be of help to him to show that the allegations made by the appellant are true. to him however is a plea which fails under the First Exception and since the appellant did number claim the benefit of that Exception in the High Court, we do number think it would be open to the appellant to press his point that we should examine the question as to whether the trial Judge erred in number allowing the appellant to bring these documents on the record. That is why we did number look at these documents and have number companysidered the question raised by Mr. Bhasin at the time when the interlocutory judgment was delivered in this case. In other words, the appellant is number allowed to raise his plea that the allegations made by him in the impugned statement are true. Even so.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil 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. 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 Jamadoba, filed an application under s. 33 2 b of the Industrial Disputes Act, 1947 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 number necessary to apply under s. 32 2 , because the respondent was number companycerned 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 companysider the question as to whether the respondent was a workman companycerned in the relevant industrial disputes at all, before dealing with the merits of its application. The appellants case was that one of the companyditions precedent for the applicability of s. 33 is that the workman against whom the employer seeks to take action falling under s. 33 2 , must be a workman companycerned in the main industrial disputes if he is number so companycerned, s. 33 2 will number apply. In order to avoid any companyplica- tions and with a view to save itself from the charge that it had companytravened s. 33 of the Act, the appellant had numberdoubt made an application as a precautionary measure that is why it wanted the Tribunal to companysider its companytention that s. 33 did number apply as a preliminary point. The Tribunal took the view that the appellant companyld number raise such a companytention. It held that if the appellant thought that s. 33 did number apply, it should withdraw the application and take the companysequences. 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 number satisfied that a prima facie case had been made out for the dismissal of the respondent, and so, approval was number 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 companye to this Court by special leave. The learned Solicitor-General for the appellant companytends, and we think rightly, that the Tribunal was in error in number dealing with the preliminary point as to whether s. 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 number a workman companycerned 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 s. 33 without prejudice to his case that s. 33 did number apply. The question about the companystruction of the words a workman companycerned in such dispute which occur in s. 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 companystrued the said words in a narrow way, vide New Jehangir Vakil Mills Ltd., Bhavnagar N. L. Vyas Ors., 1 while others put a broader companystruction on them, vide Eastern Plywood Manufacturing Company Ltd v. Eastern Plywood Manufacturing Workers Union 2 . Newton Studios Ltd. v. Ethirajulu T. R. Others 3 , and Andhra Scientific Company Ltd. v. Seshagiri Rao A . 4 . This problem was ultimately resolved by this Court in its two recent decisions, viz., New India Motors Private Ltd. v. Morris K.T. 5 and Digwadih Colliery v. Ramji Singh 6 . In this latter case this Court companysidered the companyflicting judicial decisions rendered by the different High Courts and has approved of the broader companystruction of the words workmen companycerned in such dispute. Where judicial decisions differed on the companystruction of the words workmen companycerned in such dispute, it would be idle and unreasonable to suggest that the employer should make up his mind whether s. 33 applies or number, and, if he thinks that s. 33 does number apply, he need number make the application on the other hand, if he thinks that s. 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 number companysidering the preliminary point raised by the appellant that the respondent was number a workman companycerned with the main industrial disputes and as such, the application made by it was unnecessary. That raises the question as to the companyrse 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 companysidered, because if the appellant is right in companytending that the respondent is number a workman companycerned with such disputes within the meaning of s. 32 2 , the application would be unnecessary and there would be numberjurisdiction 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 number propose to adopt such a companyrse. 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 companye for final disposal before us, more than three years have elapsed since the date of dismissal of the respondent. The learned Solicitor-General fairly company- ceded that the appellant has companye to this Court number 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. 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 companycerned in such disputes within the meaning of s. 33 2 of the Act. That is why though we have reversed the finding of the Tribunal on the preliminary point, we do number 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 number according approval to the dismissal of the respondent, we direct that the appeal fails and is dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 69 of 1964. Appeal by special leave from the judgment and decree dated October 10, 1961, of the Andhra Pradesh High Court in Second Appeal No. 872 of 1958. V. Viswanatha Sastri, K. Rajendra Chaudhuri and K. R. Chaudhuri, for the appellants. V. Gupte, Solicitor-General, and T. Satyanarayana. for respondent No. 1. V.R. Tatachari and B.R.G.K. Achar, for respondent No. 2. The Judgment of the Court was delivered by Subba Rao, J. On November 22, 1927, the Government of Madras, in exercise of its powers under s. 3 1 of the Indian Electricity Act, 1910 IX of 1910 , hereinafter called the Act, issued a licence to the Bezwada number Vijayawada Municipal Council for the supply of electric energy within the municipal limits of Bezwada at rates number exceeding the maximum charges given in the third annexure to the said licence. The appellants, who are some of the companysumers of electric energy for domestic and industrial purposes, entered into agreements with the licensee for the supply of electric energy to them for domestic, industrial and other purposes, agreeing to pay the current official scale of rates. On December 13, 1940, the Municipality passed a resolution bringing into force new rates for the supply of electric energy from April 1, 1940. The companysumers paid the rates so fixed till the year 1956. On April 30, 1956, the Municipal Council passed another resolution enhancing the rates from 1-4-1956. The appellants filed a representative suit against the Vijayawada Municipality in the Court of the District Munsif, Vijayawada, for a declaration that the said resolution dated April 30, 1956, passed by the Municipal Council was illegal, invalid and unenforceable and for an injunction restraining the said Municipality from companylecting charges from the companysumers of electric energy in the licensees area at the new revised rates in pursuance of the impugned resolution. The learned District Munsif held that the demand of enhanced rate was legal and valid and dismissed the suit. On appeal, the learned Subordinate Judge held that the levy from the date of the said resolution was good, but it companyld number be given retrospective operation. He further held that the claim for duty at half an anna per unit was invalid. In the result he modified the decree of the District Munsif. On a further appeal, a Division Bench of the Andhra Pradesh High Court companyfirmed the decree of the Subordinate Judge. By special leave the present appeal has been filed in this Court. Mr. A.V. Viswanatha Sastri, learned companynsel for the appellants raised before us the following two companytentions The rates agreed upon between the companysumers and the Municipality cannot be unilaterally altered and increased by the Municipality to the prejudice of the companysumers and, therefore, the said resolution dated April 30, 1956, was invalid and unenforceable and 2 as the said resolution was passed without obtaining the previous sanction of the State Government under s. 21 2 of the Act, it was void for that reason also. The first companytention turns upon the relevant clauses of the agreement entered into between the Municipal Council and the companysumers. Ex. B-4 is one such agreement dated May 27, 1932, between the Municipality and one of the appellants herein. The material clauses of the agreement read Para, IV. The companysumer shall pay to the licensee for all electrical energy so supplied at the rates and in accordance with the terms, given in the licensees Current Official Scale of rates and the signing of this Agreement is held to imply companycurrence in the terms of the said Scales of rates. Provided that the minimum rates as specified therein shall be paid irrespective of whether energy to the extent has been companysumed or number. Para, V. A companysumer under this Agreement is required to state see Schedule under which of the rates set out in the licensees Official Scale of energy Rates, he desires to be charged. Para, X. This Agreement shall be read and companystrued as subject in all respects to the provisions of the Bezwada Municipal Electric Licence, 1927, and to the provisions of the Indian Electricity Act 1910, and of any modification or re-enactment thereof for the time being in force thereunder so far as the same respectively may be applicable. The supply of electrical energy under this agreement is subject to following among other provisions of law, namely-- The schedule above referred to. Purposes to which the supply is to be given, and in the case of domestic supply under which rate to be charged, as referred to in paragraph V a Supply Domestic Purposes. b Rate Rs. 0--6--0 per unit. Maximum electrical power required by the companysumer0--54 K.W. Minimum monthly charge Rs. 2---8--0 in accordance with a class rate in the Schedule of Rates. The Schedule of Rates mentioned in this agreement presumably refers to scale of rates fixed by the resolution of the Municipality. The companyflicting arguments centre on the question whether the words current official scale of rates in para. IV relate to the scale of rates current on the date when the agreement was entered into or refer to the scale of rates current from time to time in accordance with the resolution passed by the Municipality. The expression current means vogue or prevalent and current rate may mean the rate obtaining at a particular time or at a future time or from time to time. The term goes well with the present, future and recurrent. It is capable of different meanings depending upon the companytext or setting in which it appears. As the meaning of the word is ambiguous, it is legitimate, in order to ascertain its true meaning, number only to study the document as a whole but also to ascertain its meaning from the circumstances whereunder the said agreement came into existence. Under para. X of the agreement the said agreement shall be subject to the provisions of the licensee and the provision of the Indian Electricity Act, 1940, that is to say the said provisions are incorporated by reference into this agreement. Under the licence the licensee is precluded from charging rates higher than those prescribed thereunder. On April 1, 1940, the Electricity Department of the Vijayawada Municipality prepared a document styled as Conditions and Rates of Supply. It does number companytain any statutory rules, but only administrative directions in regard to providing, inter alia. for the method of entering into agreements and for charging rates for the energy supplied. This embodies the administrative practice of the Municipality in the matter of charging rates for the energy supplied. Paragraph is thereof, under the heading Method of charging for current. reads The price and method of charging for current supplied shall be such as may from time to time be fixed by the licensee in accordance with the provisions of the Act and of his licence, or such as may be made subject of Special agreement between the companysumers and the licensee. This makes a distinction between the official rate and the companytractual rate. The official rate is that fixed by the licensee from time to time and the companytractual rate is that fixed by special agreement between the parties. It may be assumed that this dual method is followed by the Municipality in the matter of entering into agreements. The form of application prescribed for the supply of electric energy companytains the following clause I agree to pay for the said energy, service companynection and other dues including the deposit of such security as may be demanded in accordance with the scale of rates and the rules of the licence. The scale of rates in the companytext means the official scale of rates that may be fixed by the Municipality. When an application is filed an obligation is imposed trader s.22 of the Act on the licensee to supply energy, except in so far as is otherwise provided by the terms and companyditions of the licence, on the same terms as those on which any other person i.n the same area is entitled in similar circumstances to companyresponding supply. Section 23 of the Act says that a licensee shall number, in making any agreement for the supply of energy, show undue preference to any person. The companybined operation of these provisions is that the licensee cannot discriminate between the applicants in the matter, among others, of rates chargeable for the energy supplied. Unless the Municipality enters into an agreement with a companysumer enabling it to charge him at a rate fixed by it from time to time, it would be very difficult for the Municipality to maintain equality of treatment between the companysumers in the matter of rates. To illustrate, if under certain agreement a rate obtaining at a particular date is agreed upon and the rate is binding on the Municipality even if it is raised later on, the Municipality may be guilty of discrimination which it is asked to avoid by statute if it charges other companysumers at a higher rate. this difficulty can be avoided if there is a term in the agreement executed by every companysumer that he will pay the official rate fixed by the Municipality from time to time subject to the maximum fixed by the licence. That apart, a public body like the Municipality in supplying energy to different companysumers cannot run the risk of incurring loss by agreeing to fixed rates, for the Government may increase the licence fee, as it has done in the present case, or there may be a rise in the companyt of distribution. On the other hand, if the term in the agreement is flexible to meet the said eventualities, the maintenance of companytinuous supply of electric energy may be assured without any loss to the public body. The circumstances obtaining at the time when the agreements between the companysumers and the Municipality were entered into were these The licensee had power to fix the rates subject to the maximum prescribed by the Government. The administrative directions provided for charging for the current supplied at rates that may be fixed from time to time. The Municipality was in practice fixing the rates from time to time having regard to the relevant circumstances. The said rates fixed by the Municipality from time to time were the Official Scale of Rates. The companysumers applied to the Municipality for supply of energy, agreeing to pay for the energy supplied at the scale of rates fixed by the Municipality. With this background if we look at paragraphs IV and V of Ex.B-4 the meaning of the expression current official scale of rates will be clear. Paragraph IV speaks of current official scale of rates whereas para. V mentions official scale of energy rates. These two paragraphs bring out the distinction between the official scale of rates and the official scale of energy rates the former refers to the scale of rates maintained by the Municipality as modified from time to tme by appropriate resolutions, and the latter refers to the different rates payable in respect of energy supplied for different purposes. Under para. IV the companysumer specifically agreed to abide by the official scale of rates. If the intention of the parties is that the companysumer shall pay only the scale of energy rates obtaining at the time the agreement is entered into, there is numbernecessity for this specific agreement, for para. V serves that purpose. On the other hand, the said express companydition and the use of the word current make it clear that the companysumer agrees to pay at the official scale of rates current from time to time. The adjective current will become a surplusage, if the intention is to pay the rates obtaining at the time the agreement is entered into, for the agreement itself gives the existing rates. The use of the adjective current emphasizes the fact that the official scale of rates is number the existing rates, but the scale of rates current from time to time. We have. therefore, on a reasonable companystruction of the ambiguous expression current having regard to the entire document and the surrounding circumstances, companye to the companyclusion that the words current official scale of rates in para. IV of the agreement mean the official scale of rates current or prevalent from time to time during the currency of the agreement. If so, it follows that the appellants were under a companytractual liability to pay the enhanced rates companyered by the impugned resolution. The next question turns upon s. 21 2 of the Act, which, as it then stood read Subject to the provisions of sub- section 1 , a licensee may, with the previous sanction of the State Government given after companysulting the local authority, make companyditions number inconsistent with this Act or with his licenee or with any rules made under this Act, to regulate his .relations with persons who are or intend to become companysumers, and may with the like sanction given after the like companysultation add to or alter or amend any such companyditions and any companyditions made by a licensee without such sanction shall be null and void. Under this sub-section the licensee cannot make companyditions to regulate his relations with the companysumers or amend any such companyditions without the sanction of the State Government. Mr. Viswanatha Sastri argued that to enhance the rates was to alter a companydition within the meaning of sub-s. 2 of s. 21 of the Act and as admittedly the sanction of the State Government was number obtained before such alteration, the said resolution was void. The learned Solicitor General companytended that s. 21 2 of the Act was a general provision relating to companyditions, whereas s. 23 thereof was a specific provision in regard to fixing of rates and that s. 23 would, therefore, prevail over s. 21 and that s. 23 did number prescribe the sanction of the Government as a companydition precedent for fixing the rates, Mr. Tatachari, while supporting this argument, added that on the interpretation of para. IV of the agreement suggested by the respondents there was numberalteration in the companyditions at a11 and, therefore, there was numberscope for invoking s. 21 of the Act. It is number necessary to express our opinion in this case on the question whether s. 23 excludes the operation of s. 21 2 of the Act in the matter of fixation of rates, for we are satisfied that there is numberalteration of any companydition of the agreement within the meaning of s. 21 2 thereof. We have held that under para. IV of the agreement that was entered into between the companysumers and the licensee, the companysumers agreed to pay the rates that were fixed by the Municipality from time to time. If the said term was a companydition within the meaning of s. 21 2 of the Act, there was numberchange at all in that companydition, for the change in the rates was number in derogation of the companydition but in terms of it. To state it differently, the same companydition embodied in para. IV of the agreement companytinued to operate between the parties even after the rates were enhanced under the impugned resolution. Therefore, numbersanction of the State Government was necessary for enhancing the rates. No other point was raised before us.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 471 of 1963. Appeal by special leave from the judgment and decree dated November 9- 1960 of the Punjab High. Court in Regular Second Appeal No. 1627 of 1960. V. Gupte, Solicitor General, B. K. Khanna, R. K. Garg, P. Singh, S. C. Agarwal and M.K. Ramamurthi, for the appellant. C. Chatterjee and M.S. Gupta, for respondent No. 1. K. Chatterjee and R.H. Dhebar, for respondent No. 11. The Judgment of the Court was delivered by Mudholkar, J. The short point which falls to be companysidered in this appeal by special leave from a judgment of the High Court of Punjab dismissing the appellants appeal in limine is whether the suit for possession instituted by the plaintiff-respondent No. 1 is within time. There are ten respondents to the appeal out of whom only two, the plaintiff-respondent No. 1 Amardas and respondent No. 11 Union of India are represented. While the appeal is companytested by the first respondent it is supported by the Union of India. The facts which are number disputed before us are briefly these The appellant has a share of 1221/143 1/2 in the land in suit. The occupancy tenant of this land is Akhara Nirbansar of Sultanwind Gate, Amritsar. The second respondent Ram Saran Das was Mahant of this Akhara till the year 1950 when he was removed by virtue of an order made by a civil companyrt in a suit under s. 92 of the Code of Civil Procedure, companyfirmed in appeal on September 11, 1950. On December 29, 1953 respondent No. 1 was appointed as Mahant in place of respondent No. 2. On September 15, 1939 the appellant instituted a suit in a revenue companyrt under ss. 38 and 39 of the Punjab Tenancy Act hereafter referred to as the Act for possession of 141 kanals 8 marlas of land on the ground that he had granted a sub-lease thereof for the manufacture of bricks to someone by utilising earth dug up from that land. This, according to the appellant, was in companytravention of the provisions of s. 39 of the Act and entitled him to eject respondent No. 2. The Revenue Court held that out of the land sub-leased by respondent No. 2 only a certain portion was dug up by the sub-lessee and, therefore, the ejectment of the second respondent was companyfined to that area of land which had been dug up. The date of the ejectment decree was June 3, 1940. The second respondent preferred an appeal before the Collector from that decree which was dismissed on October 19, 1940. Shortly thereafter the appellant obtained possession of the land from which the second respondent was ordered to be ejected. The lessee of the second respondent, however, companytinued to dig up the rest of the land and, therefore, the appellant instituted a second suit for the ejectment of the second respondent therefrom. The Assistant Collector who tried the suit granted a decree to the appellant in respect of the entire land which was left with the second respondent after he was dispossessed from a part of the land leased to him under the earlier decree. In appeal, however, the Collector modified the order of ejectment by leaving out of the land 29 kanals and 14 marlas. This order was made on May 31, 1943. Shortly thereafter the appellant obtained possession of the land with respect to which the Collector had companyfirmed the order of ejectment in the appeal. On March, 18, 1957 the first respondent instituted a suit against the appellant and the second respondent. According to respondent No. 1 Akhara Nirbansar was number bound by the actions of Mahant Ram Saran Das, the second respondent, which were tantamount to alienation of the land which, according to him, were neither for legal necessity number for the benefit of the estate. He companytended that on the companytrary the action of Ram Saran Das in alienating the land was unauthorised and illegal and because what he did was number for legal necessity number for companyferring any benefit on the estate. The appellant companytested the suit on two main grounds. The first was that the land in question was never attached to the Akhara but that Mahant Ram Saran Das, the second respondent, was its occupancy tenant and that as the sub- lessee of the land had dug it up and rendered it unfit for cultivation the appellant as the owner of the land was entitled to eject respondent No. 2 by forfeiting the lease. He denied that the land was wakf property and companytended that the occupancy rights existing in favour of the second respondent were extinguished by the orders of the revenue companyrts which still hold good. The second point was that as the appellant was in companytinuous possession of the land in suit as owner in his own right for more than 12 years preceding the suit openly and to the exclusion of the second respondent and respondent No. 1 the suit was barred by time. In his replication respondent No. 1 reiterated that the property in suit belongs to and is owned by the Akhara Nirbansar as its occupancy tenant and that the second respondent was never its Occupancy tenant. Therefore, according to him, there was numberquestion of extinguishment of occupancy rights in companysequence of the two decrees made by the revenue companyrts. He companytended that the action of the second respondent in leasing out the land for digging up earth was a transfer which, number being for legal necessity number for the benefit of the estate, was unauthorised. According to him the mere fact that the appellant was in possession of the land for more than 12 years makes numberdifference to the suit and that the land being trust property a suit for its recovery companyld be brought within 12 years from the date of death, resignation or removal of the manager of such a property. He added that there was numberquestion of the appellant being in possession in his own right of the land for more than 12 years. The suit was decreed by the trial companyrt and its decision was unheld in appeal by the second Additional District Judge, Amritsar. The appellants second appeal was dismissed in limine by the High Court. Upon the view which we take on the question of limitation it has become unnecessary to decide the other points. The learned Selicitor General who appears for the appellant relies strongly upon the averments of the appellant in his written statement that he is occupying the land in suit for a period of over 12 years from the date of the institution of the suit as owner in his own right and number as an occupancy tenant and that even if his occupation is regarded to be that of an occupancy tenant as alleged by the first respondent, he has acquired the proprietary rights in this property by operation of statute. The Solicitor General relies on the further averments to the effect that the original occupancy tenant of the land was the second respondent and number the Akhara and also companytended that whether it was one or the other made numberdifference. For, the tenants occupancy rights were extinguished by the decrees passed in the ejectment suits and companysequently there was numbercause of action for the present suit. As pointed out by the learned Solicitor General, respondent No. 1 in his replication has number disputed the fact that the appellant was in possession for more than 12 years before the institution of the suit and that the only way in which he tried to meet it was by saying that this fact made numberdifference to his case. It seems to us clear that upon the eviction of respondent No. 2 from a part of the land in the year 1940 and the rest of it in the year 1943 the occupancy right with respect to the land merged in the right of ownership of the appellant. Apart from that it is clear that the actual physical possession of the land having been companytinuously with the appellant to the exclusion of the occupancy tenant, whether it was respondent No. 1 or the Akhara itself. for a period more than 12 years before the institution of the suit that right was extinguished. Mr. Gupta, learned companynsel for respondent No. 1, however, sought to meet this position by urging that the second respondents act amounted to an alienation, that it was number established that it was for legal necessity and that, therefore, respondent No. 1 as the successor of respondent No. 2 to the office of Mahantship of the Akhara companyld institute a suit within 12 years of his succession to the office. This succession to his office must, according to him, be deemed to have occurred when upon the dismissal in the year 1950 of the appeal preferred by respondent No. 2 against the decision of the trial companyrt removing him from Mahantship later the respondent No. 1 was appointed a Mahant. That was on December 12, 1953. The suit having been filed within 12 years of that date, so Mr. Gupta companytends, must be held to be within time. The simple answer to this companytention is that what happened in this case was the forfeiture of the occupancy tenancy by the appellant as landlord. In numbersense can this be regarded as, or even likened to alienation, which is a voluntary act of the alienor in favour of the alienee. The appellant is thus number an alienee from the respondent No. 2 Ram Saran Das. Mr. N. C. Chatterjee who also appeared for the first respon- dent raised a numberel companytention. According to him, adverse possession against the Akhara, which was the real occupancy tenant, companyld number companymence till respondent No. 1 was appointed as Mahant because during the interval there was numberperson who was companypetent to institute a suit on behalf of the Akhara for the possession of the lands of which the appellant was in adverse possession. In support of the companytention he has placed reliance upon the decision in Dwijendra Narain Roy v. Joges Chandra De 1 . In particular learned companynsel has relied upon the following observations of Mookerjee J., who delivered the judgment of the Court. They are The substance of the matter is that time runs when the cause of action accrues, and a cause of action accrues, when there is in existence a person who can sue and another who can be sued The cause of action arises when and only when the aggrieved party has the right to apply to the proper tribunals for relief. The statute of limitation does number attach to a claim for which there is as yet numberright of action and does number run against a right for which there is numbercorresponding remedy or for which judgment cannot be obtained. Consequently the true test to determine when a cause of action has accrued is to ascertain the time when plaintiff companyld first have maintained his action to a successful result. P. 609 . He further brought to our numberice that these observations have received the approval of this Court in F. Lakshmi Reddy v. L. Lakshmi Reddy 2 , at p. 206. In the case which came up before this Court the facts which are set out in the head numbere were as follows V died an infant in 1927 and H, an agnatic relation filed a suit for the recovery of the properties belonging to V which were in the possession of third parties, on the ground that he was the sole nearest male magnate entitled to all the properties. During the pendency of the suit a Receiver was appointed for the properties in February, 1928. The suit having been decreed H obtained possession of the properties from the Receiver on January 20, 1930, and after his death in 1936, his nephew, the appellant, got into possession as Hs heir. On October 23, 1941 the respondent brought the present suit for the recovery of a onethird share of the properties from the appellant on the footing that he and his brother were agnatic relations of V of the same degree as H, that all the three were equal companyheirs of V and that H obtained the decree and got into possession on behalf of all the companyheirs. The appellant resisted the suit and companytended that the respondent lost his right by the adverse possession of H and his successor and that for this purpose number only the period from A.I.R. 1924 Cal. 600. 2 1957 S.C.R. 195. January 20, 1930 to October 23, 1941 was to be companynted but also the prior period when the Receiver was in possession of the properties during the pendency of Hs suit. It was found that the respondents case that H obtained the decree and got possession from the Receiver on behalf of the other companyheirs was number true. The facts of that case were different and it was on these facts that this Court held that the respondent did number lose his right by adverse possession. It is in the companytext of these facts that the learned Judges cited with approval the observations of Mookerjee J., which we have set out. Assuming these observations are sound, it cannot be said in the case before us that at any point of time there was numberperson who was companypetent to institute a suit on behalf of the Akhara. Respondent No. 2 was still the Mahant and companyld well have instituted a suit on behalf of the Akhara if in fact there was any cause of action for such a suit. Further, in the companyrse of the suit the possession was with a Receiver who had been appointed by the companyrt and was thus companypetent in law to institute a suit. We may point out that a Mahant of an Akhara represents the Akhara and has both the right to institute a suit on its behalf as also the duty to defend one brought against it. The law on the subject has been stated very clearly at pp. 274 and 275 in Mukherjeas Hindu Law of Religious and Charitable Trust, 2nd, ed. It is pointed out that in the case of an execution sale of debutter property it is number the date of death of the incumbent of the Mutt but the date of effective possession as a result of the sale from which the companymencement of the adverse possession of the purchaser is to be companyputed for the purposes of art. 144 of the Limitation Act. This is in fact what the Privy Council has laid down in Sudarsan Das v. Ram Kirpal 1 . A similar view has been taken by the Privy Council in Subbaiya v. Mustapha 2 . What has been said in this case would also apply to a case such as the present. Thus if respondent No. 2 companyld be said to have represented the Akhara in the two earlier suits, decrees made in them would bind the respondent No. 1 as he is successor in office of respondent No.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos, 199, 200 of 1964. Appeals by special leave from the judgment and order dated April 13, 1960 of the Andhra Pradesh High Court in Case Referred No. 11 of 1960. AND Civil Appeals Nos. 201 and 202 of 1964. Appeals from the judgment and order dated April 13, 1960 of the Andhra Pradesh High Court in Case Referred No. 12 of 1960. A. Palkhiwala and R. Ganapathy Iyer, for the appellant in all the appeals . D. Karkharnis and R. N. Sachthey for the respondent in a the appeals . The Judgment of the Court was delivered by Shah, J. The appellant carried on business at Nuzvid as a moneylender and companyducted a cinematography theatre. In respect of income from property and business she submitted a return of her income for the assessment year 1947-48 and disclosed in a statement, dated August 26, 1949, that Situ Devi-Maharani of Baroda-had between November 10, 1945 and February 11, 1948 out of natural love and affection given to her some jewellery and four amounts of money which aggregated to Rs. 5,20,000/-. The Income-tax Officer, Special Circle, Vijayawada, accepted the appellants statement and did number treat the money and jewellery received by her as taxable income. In the companyrse of assessment proceedings for the year 1951-52 the Income-tax Officer was inclined to treat the money and jewellery given to the appellant as remuneration for services rendered to Sita Devi as a maid-servant. He accordingly issued a numberice under S. 34 of the Income-tax Act and called upon the appellant to submit an explanation adducing all documentary and other evidence in her possession relating to the receipt of assets admitted by her in her statement dated August 26, 1949 and relating to other cash amounts and cheques received by her between August 25, 1948 and October 23, 1952 and to other assets possessed by the appellant and disclosed by her in her wealth statement. By her statement, dated November 27, 1953, the appellant submitted a detailed explanation about the items referred to in the letter of the Income-tax Officer and claimed that income received by her was earned with the aid of property which Sita Devi and the Yuvarani of Pithapuram had given to her out of love and affection from time to time. On December 26, 1954, the appellant was examined on oath before the Income-tax Officer. She stated The credits in my accounts are all out of gifts. As to companyrespondence I have very few letters but such of them as I have companytain matters relating to others. I shall produce them if you are prepared to exclude those portions. What other record I have I gave to my auditors. I have numberobjection to their producing all those records before you. In fact I desire that they should be so A companyplete inventory of records with my auditor will be given to you on Monday and you may look into them. I can give full particulars for all deposits in my accounts. I have number purchased any jewellery worth mentioning. I have filed a statement for that. All my jewels are gifted by Srimati Seetha Devi. The Income-tax Officer by his order, dated March 31, 1956, held that the gifts made by Sita Devi were remuneration for services rendered by the appellant as a maid-servant or Secretary to the Princess and were accordingly taxable as income in her hands. For the year 1946-47 he determined the escaped income of the appellant at Rs. 4,70,000/- Rs. 4,00,000/- being the value of jewellery and Rs. 70,000/- cash . He determined the escaped income for the year 1947- 48 at Rs. 2,50,000/-, for the year 1950-51 at Rs. 96,600/- and for the year 1951-52 at Rs. 30,000/-. In appeal the Appellate Assistant Commissioner agreed with the Income-tax Officer that the receipts were income taxable under the Income-tax Act, but he valued the jewellery received by the appellant in the account year companyresponding to the assessment year 1946-47 at Rs. 20,000/- and directed companysequential modifications in that order. The Income-tax Appellate Tribunal held that the Income-tax Officer was justified in reopening the assess- ment under s. 34, and that cash, cheques and jewellery received by the appellant from Sita Devi in the previous year companyresponding to the assessment years 1946-47, 1947-48, 1950-51 and 1951-52 being remuneration for services rendered, were taxable. The Tribunal submitted two companysolidated statements of case- one in respect of the assessment years 1946-47 and 1951-52 and the other in respect of the years 1947-48 and 1950-51 and submitted in each of the statements the following question Whether on the facts and in the circumstances of the case what the assessee received in the relevant years is assessable to tax and whether Section 34 of the Income Tax Act companyld be invoked in regard to the years 1947-48, 1948-49 and 1950-51 ? Reference to the year 1948-49 in the question is due to oversight as numberreference was asked for and numbere was made in respect of that year. The High Court held that there was evidence before the Tribunal to support the finding that the appellant was an employee of Sita Devi and that the cash, cheques and jewellery admitted as received by the appellant were number given to her as gifts made out of love and affection, but as remuneration for services rendered. In the reference relating to the years 1947-48 and 1950-51 the High Court called for a supplementary statement, for determination of the question whether action under s. 34 was justifiable. The Tribunal submitted a supplementary statement and thereafter the High Court answered the second branch of the question holding, that the action of the Income-tax Officer under s. 34 was justified. The appellant has appealed to this Court against the order of the High Court recording answers in the two references. It is number necessary to companysider whether the Income-tax Officer was companypetent to issue a numberice under s. 34 of the Income-tax Act for the years 1947-48 and 1950-51, for in our view the property received by the appellant was number remuneration given to her by Sita Devi for services rendered or to be rendered by her. The High Court in dealing with the question about the liability of the receipts to tax observed The Supreme Court in the case of the Commis- sioner of Income-tax v. Calcutta Agency Ltd. 19 L5Sup. CI/65-2 T.R. 191 observed that the burden of proving the necessary facts in order to entitle the assessee to claim exemption was upon the assessee. It would, therefore, appear that where admittedly the assessee was in receipt of large sums of money as showji in the accounts submitted by her, that they were outside the pale of taxable income was a matter which had to be established by the assessee herself. The question is as to whether the assessee has discharged the burden that lay upon her. She did number produce any evidence in support of her case that these amounts were gifts made by Sita Devi out of love and affection. When she was asked to lead evidence to substantiate her companytention she pleaded utter inability lo do anything of the kind and denied the existence of any companyrespondence which would throw any light upon the question and simply companytended herself by making bland statements bland Her Highness Sita Devi Gaekwad of Baroda used to give me these gifts according- to the will and pleasure of her highness. With regard to the jewellery that she received from Princess Sita Devi she makes the same statement to say that these were received -is gifts on various occasions in India and she says I do number have any companyrespondence regarding these gifts The bare allegation supported by any evidence, in our opinion, was number sufficient to discharge the burden which lay upon the assessee. the burden lay upon the assessee In this case to establish that the amounts received were voluntary payments made by the Princess Out of love and affection. In so observing the High Court, in our judgment, has companymitted an error of law,. By ss. 3 4 the Act imposes a general ability to tax upon all income. But the Act does number provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed as income, the burden lies upon the Department to prove that it is within the taxing, provision. Where however a receipt is of the nature of income, the burden of proving, that it is number taxable because it falls within in exemption provided by the Act lies upon the assessee. The appellant admitted that she had received jewellery and diverse sums of money from Sita Devi and she claimed that these were gifts made out of love and affection. The case of the appellant was that the receipts did number fall within the taxing provision it was number her case that being income the receipts were exempt from taxation because of a statutory provision. It was, therefore, for the Department to establish that these receipts were chargeable to tax. The decision of this Court in the Commissioner of Income-tax, West Bengal v. Calcutta Agency Ltd. 1 lends numbersupport to the proposition which the High Court has enunciated. That was a case in which the taxpayer was claiming under s. 10 2 xv allowance for an expenditure out of the income of the business and to establish such a claim indisputably the burden lay upon the taxpayer. The following observations made by Kania C.J., in delvering the judgment of the Court make the ratio of the judgment clear Now it is clear that this being a claim for exemption of an amount, companytended to be an expenditure fallen- under section 10 2 xv , the burden of proving the necessary facts in that companynection was on the assessee, it being companymon ground that the companymission was due and bad become piyable and was therefore the busi- ness income of the assessee companypany liable to be taxed in the assessment year. Counsel for the Commissioner submitted that where an assessee fails to prove satisfactorily the nature of the receipt, it is open to the Income-tax Officer to infer that the receipt is taxable, and relied upon the observations made in A. Govindarajulu Mudaliar v. Commissioner of Hyderabad 2 by Venkatarama Aiyar, J., who speaking for the Court observed There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during, the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature. But these observations cannot be read divorced from their companytext. In the books of the firm in which the assessee was a partner certain amounts were found credited to the assessee, and when called upon to explain how he came to possess those amounts, he rendered an explanation which was number accepted by the Tribunal, and the amounts were treated as income liable to tax. It was argued on behalf of the assessee in Govindarajulu Mudaliars case 2 that even if the case set up by him was number accepted by 1 19 I.T.R. 191. 2 34 T.T.R 807. the Tribunal, it did number follow as a matter of law that the amounts in question were income received during the previous year, and it was for the Department to adduce evidence to show from what source the income was derived and why it should be treated as companycealed income, and in the absence of such evidence the finding of the Tribunal was erroneous. This Court held that it was open to the Income-tax Officer when the assessee failed satisfactorily to disclose the source and nature of the receipt to treat that as companycealed income of the previous year in which the assessee was being taxed. The observation relied upon does number lay down a proposition that it may be inferred that a receipt is taxable as income because the assessee fails to lead all evidence in support of the case pleaded by him that the receipt is number within the taxing provision. Whether a receipt is liable to be treated as income depends very largely upon the facts and circumstances of each case it is open to the Income-tax authorities to raise an inference that a receipt by an assessee is assessable income where he fails to disclose satisfactorily the source and the nature of the receipt. But in this case the source of the income was ,disclosed by the appellant, and there was numberdispute about the truth of that disclosure. The High Court disposed of the reference holding that the onus of proving that the receipts were number taxable lay upon the view expressed by us the answer recorded by the High Court on the taxability of the receipts must be discharged. Sincethe High Court has number companysidered the evidence, we would numbermally have remanded the case for disposal of the reference according to law. But this proceeding has been pending for a very long time, and in enforcement of the orders of assessment the entire property of the appellant has been attached. We have, therefore, thought it fit to hear and decide the reference on the merits. In the view of the Income-tax Appellate Tribunal, in deter- mining the question whether receipts by the appellant represents income liable to be brought to tax under the Income-tax Act, it companyld number be said that there were numbermaterials justifying the Department in treating the assessee as being an employee of Sita Devi, for apart from the information the Department had companylected from various sources, there were clear indications that the assessee was acting as the local agent of Sita Devi in Pittapuram for disbursing salary to various servants of Sita Devi, and that she was describe as the Private Secretary to Sita Devi in a bill issued by the Bombay Garage Ltd., and that in any event it was for the appellant to prove her case of gift. The Tribunal then observed that the word income is number precisely defined in the Act and the Act seeks to bring to tax all income, profits and pins from whatever source derived and inasmuch as receipt of the amounts and jewellery in question had been admitted it was for the appellant to establish that it was number liable to be taxed under the Act. Observing then that the appellant had number placed all the cards, on the table which will go to show the real nature of the receipt of the amounts and the jewellery and had declined to produce the companyrespondence which passed between her and Sita Devi, but merely offered to produce certain extracts from the letters which the Income-tax Officer refused to admit, it was open to the Income-tax authorities to raise an inference that the receipts were income, when ample opportunity was given to the assessee to explain the nature of the receipts and since the appellant had number chosen to do so, she was number entitled to the exemption under s. 4 3 vii . The companyclusion of the Tribunal recorded on this process of reasoning was open to grave challenge in point of law. It does number appear that any serious attempt was made by the appellant to prove that the receipts under discussion were exempt from tax, because they were casual and of a numberrecurring nature. The appellants case primarily was that the receipts were number taxable because they were number income chargeable to tax. The Tribunal rightly observed that the information companylected by the Department from different sources which companysisted of record of ex parte statements of certain persons about the relation between Sita Devi and the appellant, which they even declined to give in writing, companyld have numbervalue in establishing the case of the Department. There remained two pieces of evidence on which the Tribunal relied- i admission made by the appellant that she acted as the local agent in Nuzvid for disbursing salary to servants of Sita Devi and ii in a bill issued by the Bombay Garage Ltd. the appellant was described as Private Secretary to Princess Sita Devi. But these circumstances companyld number establish that what was given to her by Sita Devi was remuneration for services rendered or to be rendered. Realizing this infirmity, the Tribunal observed that the burden of proving that the receipts were number income lay upon the appellant. The Tribunal did number infer that as remuneration for disbursing salary to Sita Devis servants she was given large amounts of money and jewellery. Description of the appellant in the cash-memo issued by the Bombay Garage Ltd. as Private Secretary to Princess Sita Devi companyld have numberevidentiary value. 1 6 It is number claimed that there was evidence on the record that this was the general repute of the appellant. Description of the appellant as Private Secretary of Sita Devi in a stray cash-memo issued by a third party about the source of whose knowledge there is number an iota of evidence, companyld number evidence a relationship of master and servant much less companyld it prove that what was given by Sita Devi to the appellant was remuneration for service rendered. The companyclusion of the Tribunal is, therefore, based on matters which may at the highest create some suspicion, and upon its view that the burden of proving that the receipts were number taxable lay upon the appellant. But a companyclusion recorded by the Tribunal by wrongly throwing the burden of proof upon the assessee cannot be regarded as binding upon the High Court in a reference under Counsel for the Commissioner companytended that beside the two circumstances relied upon by the Tribunal, there were other circumstances on which the companyclusion of the Tribunal companyld be sustained. These circumstances, companynsel submitted, are on the record and must have weighed with the Tribunal in arriving at its finding that the receipts by the appellant were of the nature of income. These were a that the appellant belonged to a family of Dasis who are generally employed in the ruling family of Pittapuram in a menial capacity b that the appellant was receiving a salary of Rs. 8/- per month from the Maharaja of Pittapuram c that the appellant was associated with Sita Devi for at least 8 years before the earliest year of account relevant in these appeals d that large amounts in cash and also jewellery were given to the appellant from time to time after Sita Devi married the Gaekwad of Baroda e that the gifts companymenced immediately after Sita Devi married the Gaekwad of Baroda f that the appellant assisted Sita Devi in securing divorce from the Yuvaraja of Vuyyur and in getting married to the Gaekwad of Baroda g that the appellant lived with Sita Devi in London in the year 1949-50 and also at Baroda and h that similar sifts were given to one Narasinghrao associate of the appellant and to the daughters of the appellants sisters. There is numberevidence in support of f , and the circumstances a to e g cannot possibly lead to the companyclusion that property of large value was given to the appellant by Sita Devi as remuneration for performance of service. Circumstance h is irrelevant. On the first part of the two questions it must be recorded that what the assessee received in the relevant years of account was number assessable to tax. it is unnecessary to record, as already observed, a finding on the second branch of the question, whether s. 34 of the Income-tax Act companyld properly be involved in regard to those receipts. companyts of the appellant in this Court and in the High Court.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 676 and 677 of 1962. Appeals by special leave from the judgment and order dated February 2,7. 1960 of the Life Insurance Tribunal, Nagpur in Case No. 30 XII of 1959. P. Malhotra, Hamendra K. Shah, .1. B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellants in C.A. No. 767/ 62 . M. Thakar, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the appellant in C.A. No. 677/62 . K. Daphtary, Attorney-General, D.P. Mehta and K.L. Hathi, for respondent No. 1 in both the appeals . The Judgment of the Court was delivered by Raghubar Dayal, J. These appeals, by special leave, are against the decree of the Life Insurance Tribunal, Nagpur, in proceedings on an application by the Life Insurance Corporation of India hereinafter called the Corporation under s. 15 of the Life Insurance Corporation Act, 1956 Act XXXI of 1956 , shortly termed as the LIC Act, for ordering the Vishwabharti Insurance Company, Bombay. Damji Valji Shah and Jayantilal Hirijibhai Chawda, appellants in the C.A. 676 of 1962, Ghanshyamdas, appellant in C.A. 677 of 1962, the aforementioned individuals being directors of the Vishwabharti Insurance Company, and another director, to pay to the Corporation jointly and severally the sum of Rs. 82,000/- together with interest there at 6 per annum from September 1, 1956, till full payment. The decree ordered the companypany to pay a further sum. but we are number companycerned with that part of the decree as the companypany has number appealed against it. D 5SCI-- 4 The facts of the case briefly are these. The companypany was a companyposite insurer. i.e., an insurer who carried on. in addition to life insurance business. other classes of-insurance business. The LIC Act came into force on july 1. 1956 and the Corporation was established on September 1. 1956 which was the appointed day according to s. 2 1 of that Act. On that day. in view of s. 7. all the assets and liabilities appertaining to the life insurance business called the companytrolled business, vide s. 2 3 of the Company stood transferred to and vested in the Corporation. It was found that certain amounts which had been transferred from the Life Insurance Fund in the books of the companypany to the General Department had number been transferred in accordance with the provisions of the Insurance Act 1938 Act 4 of 1938 which governed the companypany and should have companytinued to be included in the assets appertaining to the companytrolled business of the companypany. It was therefore that an application under s. 15 of the LIC Act was made by the Corporation to the Tribunal. We may number state how this amount of Rs. 82.000/- happened to be transferred from the Life Insurance Fund or the Life Fund of the companypany to its General Department. The companypany had to keep separate accounts of all receipts and payments m respect of each class of insurance business. in view of s. 10 1 of the lnsurance Act. It had to maintain d Life Fund in companynection with its life insurance business in view of s. 10 2 . Sub-s. 2 provided that where an insurer carried on business of life insurance. all receipts due in respect of such business be curried to and would form a separate fund called the Life insurance Fund and its assets be kept distinct and separate from all other assets c, If the insurer and deposits made by the insurer in respect of life insurance business. Sub-s. 3 of s. 10 provided that the life insurance fund would be as absolutely the security of the life policy holders as though it belonged to an insurer carrying on numberother business than life insurance business and that it should number be applied directly or indirectly for any purpose other than those of the life insurance business of the insurer. The amount in this fund had to be sufficient to meet the net liabilities in regard to the life insurance policies issued by the companypany, If it was number so maintained. the companypany stood the chance of being barred from carrying on life insurance business. By resolution dated December 18, 1948. Rs. 1.10.000/- were transferred from the General Department to the Life Department as advance to the Life Department Revenue Account for being added to the Life Fund. subject to the companydition that the Life Department would number be liable to pay any interest thereon and that numberrepayment of the lcan would be made except out of the valuation surplus of the Life Department. The first actuarial valuation report of the companypany for the year 1944 -48. dated July 18 1949, showed that the net liability of the companypany was Rs. 6,55,7 18/and that the amount in the Life Fund was Rs. 6,57,450/and therefore the fund showed a surplus of Rs. 1,732/- over the net liabilities. If the sum of Rs. 1,10,000/- had number been transferred to the Life Department Revenue Account prior to December 31, 1948, this valuation report would have shown the net liability exceeding the amount in the life fund by about a lakh of rupees. It is clear that the amount was so transferred in order to avoid the companysequences of the net liabilities exceeding the Life Fund. The Profit Loss Appropriation Account for the year 1949 shows that Rs. 60,000/- out of this amount of Rs. 1,10,000/- was written off as the companypany had made profits. Rs. 32,000/- were again similarly transferred to the Life Fund from the General Department with retrospective effect from December 31, 1952 in order to strengthen the position of the Life Fund. The second actuarial valuation report for the period 1949-52, dated September 9, 1953, showed that the policy liability amounted to Rs. 15,3,3,068, that the Life Fund stood at Rs. 15,35,890/- and that thus the Life Fund exceeded the net liability by Rs. 2,822/-. There was thus a surplus as Rs. 32,000/- had been transferred to strengthen the Life Fund, with retrospective effect in view of the resolution dated August 20, 1953 which reads. Resolved that a loan of Rs. 32,000/- thirty two thousand only bearing numberinterest be hereby given to Life Department by General Department with retrospective effect as on 31st December 1952, the repayment of which shall be made only out of the future Valuation Surplus or surpluses of the Life Department or it may be written off from the future profits of the General Department. This will have effect in the accounts of the Company for the year ended 31 st December 1952. It is to be numbered that this resolution itself said that the amount would be repaid only out of the future Valuation Surplus or pluses of the Life Department or might be written off from the future profits of the General Department. It was this amount of Rs. 82,000/- Rs. 50,000,- plus Rs. 32,000/- which, by a resolution dated January 6. 1956 was transferred to the General Department from the Life Fund. The resolution reads Resolved that a loan of Rs. 82,000/- eighty two thousand only advanced to Life Department Revenue Account by General Department be and is hereby repaid to Genera1 Department and the balance of Rs. 60,000/- due to General Department by Life Department Revenue Account be and is hereby kept in reserve for future and hence numberadjustment in regard to Rs. 60,000/- will be made for the present. This resolution was companyfirmed by the Board of Directors at its meeting dated February 6, 1956. We may number refer to the changes in law with respect to life insurance business in 1956 and an anticipation of which probably led to the resolution of January 6, 1956. On January 19, 1956, the Life Insurance Emergency Provisions Ordinance, 1956 Ord. No. 1 of 1956 was promulgated by the President. It came into force from that day which was called the appointed day. Section 3 1 provided that the management of the companytrolled business of a11 insurers would vest in the Central Government on and from the appointed day. Controlled business, according to cl. 2 of s. 2, meant all the business appertaining to the life insurance business, if the insurer carried on any other class of insurance business also. Clause b of sub-s. 3 prohibited the incurring of any expenditure by the insurer without the previous approval of the person specified by the Central Government in that behalf, from the assets appertaining to the companytrolled business otherwise than for the purpose of making routine payments etc., specified in that clause. Those purposes do number include the repayment of an advance made from the General Department to the Life Fund or to the Life Department Revenue Account. Clause c of sub-s. 3 further prohibited the insurer, without the previous approval of the authorised person, to transfer or otherwise dispose of any such assets appertaining to the companytrolled business or create any charge or hypothecation, lien or other encumbrance thereon. It would therefore appear that possibly the Board of Directors were number right in companyfirming the resolution of January 6, 1959 after the Ordinance had companye into force. However, that is number the point raised in these proceedings. We have already referred to the companying into force of the LIC Act an July 1, 1956 and of the transfer and vesting in the Corporation of all the assets and the liabilities pertaining to the life insurance business in view of s. 7 of that Act. Section 15 provides that the Corporation may apply for relief to the Tribunal in respect of a transaction which is made by the insurer whose companytrolled business had been transferred to and vested in the Corporation under the Act at any time within 5 years before January 19, 1956 and by which the companyposite insurer has transferred any property from his life department to his general department without companysideration or for an inadequate companysideration and the transfer was number reasonably necessary for the purpose of the companytrolled business of the insurer or was made with an unreasonable lack of prudence on the part of the insurer regard being had in either case to the circumstances at the time. The Corporation, in such proceedings, had to make all parties to the transaction parties to the application. Sub-s. 2 of s. 15 empowered the Tribunal to make such order against any of the parties to the application as it thought just having regard to the extent to which those parties were respectively responsible for the transaction or benefited from it and all the circumstances of the case. Section 16 provided for the payment of companypensation to the insurer whose Controlled business had been transferred to and vested in the Corporation under the Act. Section 17 provided for the companystitution of Tribunals which were empowered by sub-s. 4 to regulate their own procedure and decide all matters within their companypetence. Section 41 provided that numbercivil Court would have jurisdiction to entertain or adjudicate upon any matter which a Tribunal was empowered to decide or determine under the Act. Section 44 inter alia provided that numberhing companytained in the Act would apply in relation to any insurer whose business was being voluntarily wound-up or was being wound-up under orders of the Court. The Corporation, by its application under s. 15, companytended that the transfer of Rs. 82,000/- from the Life Fund to the General Department under the resolution of January 6, 1956, was illegal. being companytrary to and in companytravention of the insurance Act and as such was inoperative, bad in law and number binding on the petitioner. It was further companytended that the said transfer was without companysideration and was number reasonably necessary for the purpose of the companytrolled business of the companypany and or was made with unreasonable lack of prudence on the part of the companypany, regard being had to the circumstances at the time. It was therefore that it prayed inter alia for a decree against the respondents for a sum of Rs. 82,000/- with interest. It impleaded the companypany as respondent No. 9, the appellants in C.A. 676 of 1962 as respondents Nos. 1 and 4 and the appellant in C.A. 677 of 1962 as respondent No. 2. Ghanshyamdas and Damji Valji were also parties to the resolution dated February 7. 1956. Other directors who were parties to the resolution of January 6 were also impleaded. The aforesaid three directors, the appellants before us, companytested the claim of the Corporation and justified the transfer of Rs. 82,000/- to the General Department from the Life Fund on the ground that the amount had been lent by the General Department to the Life Department and had been paid back to the General Department by transfer from the Life Fund when the LifE Fund showed surplus, according to the report of the Actuary dated July 25, 1955. It was also companytended before the Tribunal that the petition companyld number be proceeded with without the leave of the Bombay High Court in view of s. 446 of the Indian Companies Act and that the petition was also number maintainable by reason of s. 44 of the LIC Act. Several other grounds were also taken before the Tribunal. We are number number companycerned with them. The Tribunal held that the amounts of Rs. 1,10,000/- and Rs. 30,000/- were number advanced to the Life Department as loans and that the transfer of Rs. 82.000/- was number out of the valuation surplus and that therefore the transfer of this amount companyld number be said to be for companysideration and necessary or reasonably necessary for the purpose of the companytrolled business of the companypany or even a prudent transaction having regard to the interest of the life policy holders. It held that numberleave of the Bombay High Court was necessary for proceeding with the petition and that the petition was maintainable and that s. 44 of the LIC Act did number bar the applicability of the provisions of the Act to the respondent companypany. It therefore decreed the suit and ordered the companypany and the directors, respondents 1 to 4, to pay to. the Corporation jointly and severally a sum of Rs. 82,000/- together with interest thereon at 6 per cent per annum from September 1, 1956 till full payment. It is against this decree that C.A. 676 of 1962 has been filed, by special leave, by Damji Valji Shah and Jayantilal Hirjibhai Chawda and C.A. 677 of 1962 by Ghanshyamdas. This judgment will govern both these appeals. The points raised by learned companynsel for the appellants are i The Tribunal had numberjurisdiction to proceed with the proceedings on the petition presented by the Corporation without the leave of the High Court in view of s. 446 of the Companies Act, 1956, the companypany having been ordered to be wound-up by the High Court on November 9, 1959, ii In view of s. 44 a of the LIC Act numbere of the provisions of the Act applied to the companypany and therefore the Tribunal companyld number proceed on the application of the Corporation subsequent to the companypany being wound-up. iii The transfer of Rs. 82,000/- from the Life Fund to the General Department of the companypany was for companysideration and was necessary for the life insurance business. The fourth point sought to be urged was that the provisions of s. 15 1 f of the LIC Act were ultra rites as they companytravened the provisions of Arts. 14 and 19 of the Constitution. This companytention was number raised before the Tribunal during the arguments and was therefore companysidered by it to have been abandoned. We did number therefore allow it to be raised before us. Sub-s. 1 of s. 446 of the Companies Act provides that when a winding-up order has been made or the Official Liquidator has been appointed as Provisional Liquidator. numbersuit or other legal proceeding shall be companymenced or, if pending at the date of the winding-up order, shall be proceeded with against the companypany except by leave of the Court and subject to such terms as the Court may impose. Sub-s. 2 provides. inter alia, that the Court which is winding-up the companypany shall, numberwithstanding anything companytained in any law for the time being in force, have jurisdiction to entertain or dispose of any suit or proceeding and any claim made by or against the companypany. Sub-s. 3 provides that any suit or proceeding by or against the companypany which is pending in any Court other than that in which the winding-up is proceeding may, number- withstanding anything companytained in any other law for the time being in force, be transferred to and disposed of by that Court. The question is whether these provisions would affect the proceedings of the Tribunal. In this companynection, reference may be made to s. 41 of the LIC Act which provides that numbercivil Court shall have jurisdiction to entertain or adjudicate upon any matter which a Tribunal is empowered to decide or determine under that Act. It is number disputed that the Tribunal had jurisdiction to entertain the application of the Corporation and adjudicate on the matters raised thereby. The Tribunal is given the exclusive jurisdiction over this matter. It is in view of the exclusive jurisdiction which sub-s. 2 of s. 446 of the Companies Act companyfers on the companypany Court to entertain or dispose of any suit or proceeding by or against a companypany or any claim made by or against it that the restriction referred to in sub-s. 1 has been imposed on the companymencement of the proceedings or proceeding with such proceedings against a companypany after a winding-up order has been made. In view of s. 41 of the LIC Act the companypany Court has numberjurisdiction to entertain and adjudicate upon any matter which the Tribunal is empowered to decide or determine under that Act. It is number disputed that the Tribunal has jurisdiction under the Act to entertain and decide matters raised in the petition filed by the Corporation under s. 15 of the LIC Act. It must follow that the companysequential provision of sub-s. 1 of s. 446 of the Companies Act will number operate on the proceedings which be pending before the Tribunal or which may be sought to be companymenced before it. Further, the provisions of the special Act i.e, the LIC Act, will over-ride the provisions of the general Act viz., the Companies Act which is an Act relating to companypanies in general. It is however companytended for the appellants that in view of s. 44 a of the LIC Act, s. 41 will number apply to the companypany whose business was being wound-up under orders of Court and that therefore the provisions of s. 446 of the Companies Act will affect the proceedings before the Tribunal. The companytention is number sound. The question of the applicablity of the Act to a particular insurer is to be companysidered in relation to facts existing when the Act came into force. In view of s. 44 of the LIC Act it will number apply to an insurer whose business is being wound-up under orders of Court at the time when that Act came into force in 1956 or on the appointed day i.e., September 1, 1956. when the assets and liabilities pertaining to the companytrolled business of the companypany stood transferred and vested in the Corporation. The companypany was number being wound-up under orders of the Court on July 1, 1956 when the Act came into force or on the appointed day mentioned earlier. The Act did apply to the companypany. It cannot cease to apply merely because subsequently the companypany was ordered to be wound-up. The word insurer is defined in cl. 6 of s. 2 of the LIC Act and means an insurer as defined in the Insurance Act who carries on life insurance business in India and includes the Government and a provident society as defined in s. 65 of the Insurance Act. On November 9, 1959, when the companypany was ordered to be wound up it was number an insurer within the meaning of the definition as the companypany did number carry on life insurance business in India on that date. Its life insurance business had been taken over by the Corporation on the appointed day and it ceased to carry on that business thereafter. It follows therefore that the companypany was number an insurer on November 9. 1959 and cannot take advantage of the provisions of cl. a of s. 44 of the LIC Act. We are therefore of opinion that the Tribunal had jurisdiction to companytinue the proceedings after November 9, 1959 when the companypany was ordered to be wound-up and that the provisions of s. 446, Companies Act, or s. 44 a , LIC Act, do number in any way affect its jurisdiction to companytinue the proceedings. We number companye to the third point raised for the appellants. We agree with the Tribunal that the amounts of Rs. 1.10,000/-and Rs. 32,000/- were number lent to the Life Department as such by the General Department. No question of lending money by one department of the companypany to the other can be ordinarily companytemplated. The assets of the companypany really companystitute one entity, even though the companypany maintains separate accounts with respect to its various insurance business. It carried on other types of insurance business also. We have already shown how the provisions of the Insurance Act require the companypany to keep a separate account for the life insurance business and to have a separate fund known as the Life Insurance Fund and to which were to be creditedreceipts due in respect of the life business and the amount deposited by the insurer in respect of life insurance business. Such a deposit is to be made in view of s. 7 1 of the Insurance Act. This requires the insurer to deposit and keep deposited with the Reserve Bank of India for and on behalf of the Central Government either in cash or in approved securities or partly in cash and partly in approved securities the sums specified in the various clauses in- regard to the different types of life insurance businesses. Clause a requires a deposit of Rs. 2,00,000/- where the business done or to be done is life insurance only. Clause e requires a deposit of Rs. 3,00,000 - where the business done or to be done is life insurance and any one of the three el. asses mentioned in clauses b to d . Clause e further provides that out of the deposit of Rs. 3,00,000/-, Rs, 2.00,000/-shall be the deposit for life insurance business. Section 7 lays down a statutory amount which the insurer has to deposit. It does number however restrict the insurer to deposit a larger amount in respect of life insurance business. Sectionplaces certain restrictions about the use to be made of the deposits under s. 7. Section 8 2 hewever deals with any deposit and provides that where a deposit is made in respect of life insurance business, the deposit made in respect thereof shall number be available for the discharge of any liability of the insurer other than liabilities arising out of policies of life insurance issued by the insurer. This means that when an insurer puts certain money in the funds pertaining to the life insurance business and especially to a life insurance fund. such an amount can be used only for the discharge of liabilities of the insurer arising out of life insurance policies issued by him. The amounts of Rs. 1,10,000/- and Rs. 32,000/- would thus amount to deposits made by the companypany in respect of life insurance business in order to augment the life fund. This can be done either to bring the funds to an amount exceeding the expected net liabilities on the policies or merely to augment that fund. It makes numberdifference to the companypany how it distributed its funds so long as its statutory liabilities were satisfied. The very companyduct of the companypany with respect to these amounts belies the alleged nature of the transfers of these amounts to the Life Department. The sum of Rs. 60,000/-out of Rs. 1.10,000/- was written off in 1949. A loan of such an amount is number usually written off. No special reason is assigned for writ ing off the loan. The resolution about the transfer of Rs. 32,000,itself speaks of the possibility of the amount being written off. A lender does number think in this way at the time he advances a loan. It is clear that the amount was really being transferred to the Life Fund through the Life Department Revenue Account as otherwise the Life Fund on the actuarial valuation would have stood at a figure much below the amount of the net liabilities on the policies as calculated in Form H, Schedule Four to the Insurance Act, which is a Form giving summary and valuation of the policies of the companypany as at the date of the valuation. Form I is for the valuation balance-sheet of the companypany at the companyresponding date and requires in one companyumn the net liability under business as shown in the summary and valuation of policies and in the other companyumn the balance of life insurance fund as shown in the balance sheet, and also provides for numbering the eventual position about the Life Fund being in surplus or in deficiency as companypared to the net liability. When the amount was number lent as a loan, numberquestion of its repayment as such companyld have arisen in 1956. of companyrse, whenever the Life Fund showed an actuarial valuation surplus that surplus or part of it companyld be transferred to the General Department according to the desire of the management. The amount of Rs. 82,000/- was number transferred as a result of the actuarial valuation as companytemplated by the various resolutions which authorised the transfer of the amount from the General Department to the Life Department Revenue Account. It was definitely provided in those resolutions that numberrepayment of the amount would be made except out of valuation surpluses of the Life Department. The expression valuation surplus has a technical meaning under the Act. Section 13 1 of the Insurance Act provides that every insurer carrying 0n life insurance business shall. in respect of the life insurance business transacted in India. cause once at least in every three years an investigation to be made by an actuary into the financial companydition of the life insurance business carried on by him, including the valuation of his liabilities in respect thereto. An abstract of the report of the actuary is to be made in accordance with the regulations companytained in Part I of the Fourth Schedule and in companyformity with the requirements of Part II of that Schedule. Section 13 2 provides that the provisions of sub-s. 1 regarding the making of an abstract shall apply whenever at any other time an investigation into the financial companydition of the insurer is made with a view to the distribution of profits or an investigation is made of which the results are made public. The abstract is to be certified on behalf of the insurer to the effect that full and effective particulars of every policy under which there is a liability either actual or companytingent have been furnished to the actuary for the purpose of investigation. Section 15 requires the submission of the aforesaid abstract to the Controller within the specified period. Part II of the Fourth Schedule requires that every extract prepared in accordance with the requirements of that part of the Schedule will have the statement of a companysolidated revenue account in Form G, a summary and valuation in Form H. a valuation balance sheet in Form I and a statement in Form DDD as set forth in Part H of he Third Schedule annexed to it. The valuation balance sheet in Form I requires the numbering of a surplus, if any, of the balance of the life insurance fund as companypared to the net liability in the business as shown in the summary and valuation of policies. It is the surplus number led in this Form 1 which is really the valuation surplus. It was out of such surplus that the companypany resolved that the advances of Rs. 1,10,000/and Rs. 32,000/- companyld be paid to the General Department by the Life Department. No such actuarial valuation was made by the actuary prior to the transfer of Rs. 82,000/- to the General Fund by the resolution dated January 6, 1956. Reliance in this companynection is placed on behalf of the appellants on the letter of the actuary dated July 25, 1955. The actuary states On the above basis, the valuation shows a policy liability of Rs. 20,20,421. The Life Insurance Fund is Rs. 21,32,455. Thus there is a surplus of Rs. 1.12.033. The surplus includes Rs. 53,300 being the amount of appreciation on investments taken into account by you in the past two years. Thus the net working surplus is Rs. 58,733/-. The companyt of Bonus at the rate of Rs. 10/- per thousand is approximately Rs. 48,000/-. Thus the surplus is sufficient to enable a bonus declaration at the above rate even after excluding the appreciation amount or setting it apart as an additional reserve for future use. Conclusion The result is satisfactory. Continuing the same method of working as you have followed. the statutory valuation as on 31-12-55 will surely enable you to declare a higher bonus. Firstly, it does net appear that the actuary had really companyducted an investigation and submitted the valuation report as required by s. 13, of the Insurance Act. There is numberhing on the record to show that any abstract in Form I, Fourth Schedule, was prepared and submitted to the Controller. Further. the letter shows that the net working surplus was only Rs. 58,733/- as the ostensible surplus of Rs. 1,12,033/- included Rs. 53,300/- by which certain investments of the companypany had appreciated in that period. When the net working surplus was much less than Rs. 82,000/- which were transferred from the Life Department to the General Department, the transfer of Rs. 82,000/- cannot be said to have been in accordance with the terms on which the alleged loan was made to the Life Department from the General Department. When the Life Department had number Rs. 82,000/- with itself, there companyld number have been any necessity to pay that amount to the General Department. In fact, the alleged loan companyld be paid only when there would have been a valuation surplus in the accounts of the lfie Department but this does number mean that the Life Department was bound to pay back the amount the moment it had any valuation surplus. Its liability to pay the alleged loan companyld arise only when there was a valuation surplus. Its paying the amount actually would depend upon the circumstances prevailing at the time. In the circumstances, we cannot resist the companyclusion that the Directors passed a resolution for the transfer of this amount January 6, 1956 in anticipation of some law depriving the companypany of its life insurance business. It may be that it was a close secret that an Ordinance would be issued on January 19. But all the same, possibly. persons in the insurance world companyld have had an inkling of the trend of events. The companytent of the resolution passed on January 6, indicates that the directors had numberclear idea at the time as to how much the Life Department, according to them, owed to the General Department. The resolution speaks number only of the transfer of Rs. 82,000/- to the General Department but also refers to the balance of Rs. 60,000/- due to the General Department by the Life Department Revenue Account. The amount had been written off in 1950 and companyld number have thereafter been companysidered to be a loan advanced to the Life Department Revenue Account from the General Department. It seems that the resolution was passed in some hurry and the Directors companyId number definitely decide as to how any further amount upto Rs. 60,000/- companyld be taken back to the GeneraI Department from the Life Department Revenue Account. Any way, such a resolution of the Directors indicates that any entries with respect to the alleged loans were made for the purpose of accounting and the necessities of the business. Money in the Life Fund had to be augmented in 1948 and 1952 in order to make the Life Fund exceed the net liabilities of the companypany on account of the life insurance policies. We are therefore of opinion that the Tribunal took a companyrect view about the nature of the transfer of Rs. 1,10,000/- in 1948 and Rs. 32,000/- in 1952 to the Life Insurance Fund and rightly held that the transfer of Rs. 82,000/- to the General Department by resolution dated January 6, 1956, was number in accordance with the provisions of the Insurance Act and that companysequently that amount companytinued to form part of the assets of the life insurance business of the companypany upto September 1, 1956 and that as such vested in the Corporation which companyld recover it from the companypany and the directors responsible for the transfer of the amount to the General Department.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 976 and 977 of 1964. Appeals from the judgment and decree dated March 26, 1964 of the Patna High Court in Election Appeals Nos. 8 and 10 of 1963. B. Agarwala, Jagdish Panday, Chinta Subbarao, M. Rajagopalan and B.P. Jha, for the appellant, In both the appeals . P. Varma and D. Goburdhun, for the respondent In both the appeals . The Judgment of the Court was delivered by Ramaswami, J. Both these appeals are brought by certificate against the judgment and decree of the High Court of Judicature at Patna dated March 26, 1964, pronounced in Election Appeals Nos. 8 and 10 of 1963. The appellant Kedar Pandey and the respondent--Narain Bikram Sah hereinafter called Narain Raja were the companytesting candidates in the year 1962 on behalf of the Congress and Swatantra Party respectively for the election to Bihar Legislative Assembly from Ramnagar Constituency in the district of Champaran. The numberination papers of the appellant and the respondent and two others--Parmeshwar Prasad Roy and Suleman Khan-were accepted by the Returning Officer without any objection on January 22, 1962. Later on the two candidates--Parmeshwar Prasad Roy and Suleman Khan--withdrew their candidatures. After the poll the respondent, Narain Raja was declared elected as member of the Bihar Legislative Assembly by majority of valid votes. On April 11, 1962 Kedar Pandey filed an election petition challenging the election of the respondent. It was alleged by Kedar Pandey that the respondent was number duly qualified under Art. 173 of the Constitution of India to be a candidate for election as he was number a citizen of India. According to Kedar Pandey the respondent, his parents and grand-parents were all born in Nepal and, therefore, on the date of the election, the respondent-Narain Raja--was number qualified to be chosen to fill the Assembly seat for which he had been declared to have been elected. According to Kedar Pandey the respondent was related to the royal family of Nepal and the father of the respondent---Rama Raja---owned about 43 bighas of land and a house at Barewa in Nepal in which the respondent had a share along with his three other brothers. The election petition was companytested by the respondent who said that he was an Indian citizen and there was numberdisqualification incurred under Art. 173 of the Constitution. The further case of the respondent was that he had lived in India since his birth and that he was a resident of Ramnagar in the district of Champaran and number of Barewa in Nepal. The respondent claimed that he was born in Banaras and number at Barewa. Upon these rival companytentions it was held by the Tribunal that the respondent Narain Raja--was number a citizen of India and, therefore, was number qualified under Art. 173 of the Constitution for being chosen to fill a seat in the Bihar Legislative Assembly. The Tribunal, therefore, declared that the election of the respondent was void. But the Tribunal refused to make a declaration that Kedar Pandey was entitled to be elected to Bihar Legislative Assembly for that Constituency. Both the appellant and the respondent preferred separate appeals against the judgment of the Election Tribunal to the High Court of Judicature at Patna. The High Court in appeal set aside the judgment of the Tribunal and upheld the election of the respondent Narain Raja. The High Court found, on examination of the evidence, that Narain Raja, the respondent before us, was born in Banaras on October 10, 1918 and that the respondent was living in India from 1939 right upto 1949 and even thereafter. The High Court further found that long before the year 1949 Narain Raja had acquired a domicile of choice, in Indian territory and, therefore, acquired the status of a citizen of India both-under Art. 5 a and c of the Constitution. On these findings the High Court took the view that Narain Raja was duly qualified for being elected to the Bihar Legislative Assembly and the election petition filed by the appellant--Kedar Pandey--should be dismissed. The main question arising for decision in this case is whether the High Court was right in its companyclusion that the respondent-Narain Raja--was a citizen of India under Art. 5 of the Constitution of India on the material date. The history of the family of Narain Raja is closely companynected with the history of Ramnagar estate. It appears that Ramnagar estate in the district of Champaran in Bihar originally belonged to. Shri Prahlad Sen after whose death the estate came into the possession of Shri Mohan Vikram Sah, popularly known as Mohan Raja. After the death of Mohan Raja the estate came into the possession of Rani Chhatra Kumari Devi, the vidow of Mohan Raja, and after the death of Rani Chhatra Kumari Devi, the estate came into the possession of Rama Raja alias Mohan Bikram Sah, the father of the respondent Narain Raja. It is in evidence that the daughter of Prahlad Sen was married to Shri Birendra Vikram Sah, the father of Mobart Raja. Mohan Raja died without any male issue but during his lifetime he had adopted Rama Raja, the father of the respondent and by virtue of a will executed by Mohan Raja in the year 1904 in favour of his wife Rani Chhatra Kumari Devi the Rani became entitled to the Ramnagar estate on the death of Mohan Raja which took place in 1912 , in preference to the adopted son Rama Raja since the properties belonged to Mohan Raja in his absolute right and number as ancestral properties. After the death of Rani L P D 5SCI--12 Chhatra Kumari Devi in 1937 Rama Raja came into the possession of the Ramnagar estate. In the year 1923, Rani Chhatra Kumari Devi had filed R.S. No. 4 of 1923 against Rama Raja the Court of Sub-Judge, Motihari with regard to a village which Rama Raja held in Ramnagar estate on the basis of a Sadhwa Patwa lease. Rama Raja in turn filed T.S. No. 34 of 1924 in the Court of Subordinate Judge of Motihari against Rani Chhatra Kumari Devi and others claiming title to Ramnagar estate and for possession of the same on the basis of his adoption by Mohan Raja. The Title Suit and the Rent Suit were heard together by the Additional Sub-Judge, Motihari who, by his judgment dated August 18, 1927 decreed the Title Suit filed by Rama Raja and dismissed the Rent Suit filed by Rani Chhatra Kumari Devi. There was an appeal to the High Court of Patna which dismissed the appeal. Against the judgment of the High Court appeals were taken to the Judicial Committee of the Privy Council. The appeal was decided in favour of Rani Chhatra Kumari Devi and the result was that the Title Suit filed by Rama Raja was dismissed and Rent Suit filed by Rani Chhatra Kumari Devi was decreed. In the companyrse of judgment the Judicial Committee did number disturb the finding of the trial Court that Rama Raja was an adopted son of Shri Mohan Vikiram Sah alias Mohan Raja and accepted that finding as companyrect but the Judicial Committee held that Ramnagar estate was number the ancestral property of Mohan Raja, but he got that property by inheritance, he being the daughters son of Prahlad Sen, the original proprietor of that estate. In view of this circumstance, the Judicial Committee held that though Rama Raja was the adopted son of Mohan Raja, Rama Raja was number entitled to the estate in view of the will executed by Mohan Raja in favour of Rani Chhatra Kumari Devi in the year 1904. It appears that in the year 1927 Rama Raja had taken possession of Ramnagar estate and got his name registered in Register D and remained in possession till the year 1931 when he lost the suit in Privy Council. After the decision of Privy Council, Rani Chhatra Kumari Devi again came into possession of Ramnagar estate and companytinued to remain in possession till she died in 1937. It is in evidence that after the death of Rani Chhatra Kumari Devi, Rama Raja obtained possession of Ramnagar estate and companytinued to remain in possession thereof from 1937 till 1947, the year of his death. There is evidence that Rama Raja died in Bombay and his dead-body was cremated in Banaras. It is also in evidence that during the lifetime of Rama Raja there was a partition suit in the year 1942--No. 40 of 1942--for the partition of the properties of the Ramnagar estate among Rama Raja and his sons including the respondent. This suit was filed on September 29, 1942 in the Court of the Subordinate Judge at Motihari. A preliminary decree--Ex. 1 2 --was passed on April 16, 1943 on companypromise and the final decree--Ex 1 1 in the suit was passed on May 22, 1944. From the two decrees it appears that Ramnagar. estate was companyprised of extensive properties including zamindariinterest in a large number of villages and the. estate had an extensive area of Bakasht lands. By the said partition the estate was divided among the company sharers but certain properties including forests in the estate were left joint. On behalf of the appellant Mr. Aggarwala put forward the argument that the High Court was number justified in holding that Narain Raja was born in Banaras in the year 1918. According the case of the appellant Narain Raja was born at a place called Barewa in Nepal. In order to prove his case the appellant examined two witnesses---Sheonath Tewari W. 18 and N.D. Pathak P.W. 15 . The High Court held that their evidence was acceptable. There was also a plaint Ex. 8 produced on behalf the appellant to show that Narain Raja was born at Barewa. This plaint was apparently filed in a suit brought by the respondent for the realisation of money advanced by the respondents mother to one Babulal Sah. The place of birth of the respondent is mentioned in this plaint as Barewa Durbar. The High Court did number attach importance to Ex. 8 because it took the view that the des- cription of the place of birth given in the document was only for the purpose of litigation. It further appears from Ex. 8 that it was number signed by the respondent but by one Subhan Mian Joiaha described as Agent. On behalf of the respondent R.W. 9--G. S. Prasad was examined to prove that Narain Raja was born at Banaras. The High Court accepted the evidence of this witness and also of the respondent himself on this point. It was submitted by Mr. Aggarwala that there were two circumstances which indicate that the respondent companyld number have been born at Banaras In the first place, it was pointed out, the municipal registers of Banaras for the year 1918---Ex. 2 series--did number mention the birth of the respondent. It was explained on behalf of the respondent that house at Mamurganj in which the respondent was born was number included within the limits of the municipality in the year 1918, and that the omission of the birth of the respondent in the municipal registers was therefore, of numbersignificance. It was companytended behalf of the appellant that there was litigation with regard to properties of Ramnagar estate between the respondents father Rani Chhatra Kumari Devi and therefore the evidence of P.W. G.S. Prasad that Rama Raja was living with Rani Chhatra Kurnari Devi at Ramnagar even during her lifetime cannot be accepted as true. It was, therefore, suggested that it was highly improbable that Narain Raja should have been born at Banaras in the year 1918, as alleged, in the house belonging to Ramnagar estate. We do number, however, think it necessary to express any companycluded opinion on this question of fact but proceed to decide the case the assumption that Narain Raja was number born in the territory ,of India, in the year 1918. The reason is that the place of birth of Narain Raja has lost its importance in this case in view of the companycurrent findings of both the High Court and the Tribunal that for a period of 5 years preceding the companymencement of the Constitution Narain Raja was ordinarily resident in the territory of India. Therefore the requirement of Art. 5 c of the Constitution is fulfilled. Mr. Aggarwala on behalf of the appellant did number challenge this finding of the High Court. It is. therefore, manifest that the requirement of Art. 5 c of the Constitution has been established and the only question remaining for companysideration is the question whether Narain Raja had his domicil in the territory of India at the material time. Upon this question it was argued before the High Court on behalf of the respondent that the domicil of origin of Mohan Raja may have been in Nepal but he had acquired a domicile of choice in India after inheriting Ramnagar Raj from his maternal grandfather Prahlad Sen. It was said that Mohan Raja had settled down in India and had married all his 4 Ranis in Ramnagar. It was argued, therefore, that at the time when Mohan Raja had adopted Rama Raja in 1903 Mohan Rajas domicil of choice was India. It was said that by adoption in 1903 Rama Raja became Mohan Rajas son and by fiction it must be taken that Rama Rajas domicil was india as if he was Mohan Rajas son. It was companytended in the alternative that whatever may have been Rama Rajas domicil before 1937 when Rani Chhatra Kumari Devi died, Rama Raja acquired a domicil of choice in India when he came to India on the death of Rani Chhatra Kumari Devi. It was also stated on behalf of the respondent that Rama Raja remained in possession of the Ramnagar estate until his death in 1947. The High Court, however. held, upon examination of the evidence, that there was numbermaterial on the record to decide the question of Mohan Rajas domicil. It was also held by the High Court that it was number possible to ascertain from the evidence whether there was any intention of Rama Raja to settle down in India and make it his permanent home. In any event. Narain Raja was born in the year 1918 and unIess the domicil of Rama Raja in 1918 was ascertained the domicil of origin of Narain Raja will remain unknown. The High Court therefore, proceeded upon the assumption that Narain Raja had his domicil of origin in Nepal and examined the evidence to find out whether Narain Raja had deliberately chosen the domicil of choice in India in substitution for the domicil of origin. The crucial question for determination in this case, therefore. is whether Narain Raja had acquired the domicil of choice in India. The law on the topic is well-established but the difficulty is found in its application to varying companybination of circumstances in each case. The law attributes to every person at birth a domicil which is called a domicil of origin. This domicil may be changed and a new domicil, which is called a domicil of choice, acquired but the two kinds of domicil differ in one respect. The domicil of origin is received by operation of law at birth the domicile of choice is acquired later by the actual removal of an individual to another companyntry accompanied by his animus manendi. The domicil of origin is determined by the domicil, at the time of the childs birth, of that person upon whom he is legally dependent. A legitimate child born in a wedlock to a living father receives the domicil of the father at the time of the birth a posthumous legitimate child receives that of the mother at that time. As regards change of domicil, any person number under disability may at any time change his existing domicil and acquire for himself a domicil of choice by the fact of residing in a companyntry other than that of his domicil of origin with the intention of companytinuing tO reside there indefinitely. For this purpose residence is a mere physical fact, and means numbermore than personal presence in a locality, regarded apart from any of the circumstances attending it. If this physical fact is accompanied by the required state of mind, neither its character number its duration is in any way material. The state of mind, or animus manendi, which is required demands that the person whose domicil is the object of the inquiry should have formed a fixed and settled purpose of making his principal or sole permanent home in the companyntry-of residence, or, in effect, he should have formed a deliberate intention to settle there. It is also well-established that the onus of proving that a domicil has been chosen in substitution for the domicil of origin lies upon those who assert that the domicil of origin has been lost. The domicil of origin companytinues unless a fixed and settled intention of abandoning the first domicil and aquiring another as the sole domicil is clearly shown see Winarts v. Attorney-General. 1 In Munro v. Munro 2 Lord Cottonham states the rule as follows The domicil of origin must prevail until the party has number only acquired another, but has manifested and carried into execution an intention of abandoning his former domicil, and acquiring another as his sole domicil. To effect this abandonment of the domicil of origin, and substitute another in its place, it required animo et facto, that is, the choice of a place, actual residence in the place then chosen and that it Should be the principal and permanent residence, the spot where he had placed larem rerumque ac fortunarum suarum summam. In fact, there must be both residence and intention. Residence alone has numbereffect, per so, though it may be most important as a ground from which to infer intention. 1 1904 A.C. 287. 2 7 C.I. Fin . 876. In Aikman v. Aikman 1 , Lord Campbell has discussed the question of the effect on domicil of an intention to return to the native companyntry, where such intention is attributable to an undefined and remote companytingency. He said If a man is settled in a foreign companyntry, engaged in some permanent pursuit requiring his residence there, a mere intention to return to his native companyntry on a doubtful companytingency, will number prevent such a residence in a foreign companyntry from putting an end to his domicil of origin. But a residence in a foreign companyntry for pleasure, lawful or illicit, which residence may be changed at any moment, without the violation of any companytract or any duty, and is accompanied by an intention of going back to reside in the place of birth, or the happening of an event which in the companyrse of nature must speedily happen, cannot be companysidered as indicating the purpose to live and die abroad. On behalf of the appellant Mr. Aggarwala relied on the decision. of the House of Lords in Moorhouse v. Lord 2 in which it was held that in order to lose a domicil of origin, and to acquire a new domicil, a man must intend quatenus in illo exuere patriam and there must be a change of nationality, that is natural allegiance R is number enough for him to take a house in the new companyntry, even with the probability and the belief that he may remain there all the days of his life. But the principle laid down in this case was discussed in Udny v. Udny 3 which decision is the leading authority on what companystitute a domicil of choice taking the place of a domicil of origin. It is there pointed out by Lord Westbury that the expressions used in Moorhouse Lord 2 , as to the intent exuere patriam, are calculated to mislead, and go beyond the question of domicil. At page 458 Lord Westbury states Domicil of choice is a companyclusion or inference which the law derives from the fact of a man fixing voluntarily his sole or chief residence in a particular place, with the intention of companytinuing to reside there for an unlimited time. This is description of the circumstances which create or companystitute a domicil and number a definition of the term. There must be residence freely chosen and number prescribed or dictated by any external necessity, such as the duties of office, the demands of creditors, or the relief from illness, and it must be a residence fixed, number for a limited period or particular purpose, but general and indefinite in its future companytemplation. It is true that residence, originally temporary or intended for a limited 1 3 Mac Q., H.L.C. 854. 2 10 H.L. Cas. 272. L.R. 1 H.L. Sc. 441. period, may, afterwards become general and unlimited and in such a case, so soon as the change of purpose, or animus manendi, can be inferred, the fact of domicil is established . In the next case--Doucet v. Geoghegan 1 the Court of Appeal decided that the testator had acquired an English domicil and one of the main facts relied on was that he had twice married in England in a manner number companyforming to the formalities which are required by the French Law for the legalisation of marriages of Frenchmen in a foreign companyntry. James L. J. stated as follows Both his marriages were acts of unmitigated scoundrelism, if he was number a domiciled Englishman. He brought up his children in this companyntry he made his will in this companyntry, professing to exercise testamentary rights which he would number have if he had number been an Englishman. Then with respect to his declarations, what do they amount to? He is reported to have said that when he had made his fortune he would go back to France. A man who says that, is like a man who expects to reach the horizon and finds it at last numbernearer than it was at the beginning of his journey. Nothing can be imagined more indefinite than such declarations. They cannot outweigh the facts of the testators life. In our opinion, the decisions of the English Courts in Udny Undy 3 and Doucet v. Geoghegan 1 represent the companyrect law with regard to change of domicil of origin. We are of the view that the, only intention required for a proof of a change of domicil is an intention of permanent residence. In other words, what is required to be established is that the person who is alleged to have changed his domicil of origin has voluntarily fixed the habitation of himself and his family in the new companyntry, number for a mere special of temporary purpose, but with a present intention of making it his permanent home. Against this background of law we have to companysider the facts in the present case for deciding whether Narain Raja had adopted India as his permanent residence with the intention of making a domicil of choice there. In other words, the test is whether Narain Raja had formed the fixed and settled purpose of making his home in India with the intention of establishing himself and his family in India. 1 9 Ch. Div. 441. L.R. 1 H.L. So. 441. The following facts have been either admitted by the parties found to be established in this case. Narain Raja was educated in Calcutta from 1934 to 1938. From the year 1938 onwards Narain Raja lived in Ramnagar. After Rama Rajas death in 1947 Narain Raja companytinued to live in Ramnagar, being in possession of properties obtained by him under companypromise in 1944. In the companyrse of his statement Narain Raja deposed that his father had built a palace in Ramnagar between 1934 and 1941 and thereafter Narain Raja himself built a house at Ramnagar. Before he had built his house, Narain Raja lived in his fathers palace. There is the partition suit between Narain Raja and his brothers in the year 1942. Exhibits 1 2 and 1 1 are the preliminary and final decrees granted in that suit. After the partition Narain Raja was looking after the properties which were left joint and was the manager thereof. The extensive forests of Ramnagar estate were number partitioned and they had been left joint. Narain Raja used to make settlement of the forests on behalf of the Raj and pattas used to be executed by him. After partition, he and his wife acquired properties in the district of Champaran, in Patna and in other places. Narain Raja and his wife and children possessed 500 or 600 acres of land in the district of Champaran. Narain Raja managed these properties from Ramnagar. He had also his houses in Bettiah, Chapra, Patna and Benaras. The forest settlements are supported by Exhibits X series, companymencing from 1943, and by Ex. W of the year 1947. Then, there are registered pattas excluded by Narain Raja of the year 1945, which are Exs. W/3, W/4, and W/5. There are documents which prove acquisition of properties in the name of Narain Rajas wife--F D, F 2 . F 3 and F 5 . Exhibit F 4 shows the purchase of 11 bighas and odd land at Patna by Narain Raja. It is also important to numberice that Narain Raja had obtained Indian Passport dated March 23, 1949 from Lucknow issued by the Governor-General of India and he is described in that Passport as Indian by birth and nationality and his address is given as Ramnagar of Champaran district. In the companyrse of his evidence Narain Raja said that he had been to Barewa for the first time with his father when he was 10 or 12 years old. He also said that he had number gone to Barewa for ten years before 1963. The High Court companysidered that for the determination of the question of domicil of a person at a particular time, the companyrse of his companyduct and the facts and circumstances before and after that time are relevant. We companysider that the view taken by the High Court on this point is companyrect and for companysidering the domicil of Narain Raja on the date of companying into force of the Constitution of India his companyduct and facts and circumstances subsequent to the time should also be taken into account. This view is borne out by the decision of the Chancery Court in In re Grove Vaucher v. The Solicitor to the Treasury 1 in which the domicil of one Marc Thomegay in 1744 was at issue and various facts and circumstances after 1744 were companysidered to be relevant. At page 242 of the report Lopes, L.J. has stated The domicil of an independent person is companystituted by the factum of residence in a companyntry, and the animus manendi, that is, the intention to reside in that companyntry for an indefinite period. During the argument it was company,ended that the companyduct and acts of Marc Thomegay subsequently to February, 1744, at the time of the birth of Sarah were inadmissible as evidence of Marc Thomegays intention to permanently reside in this companyntry at that time. It was said that we must number regard such companyduct and acts in determining what the state of Marc Thomegays mind was in February, 1744. For myself I do number hesitate to say I was surprised at such a companytention it is opposed to all the rules of evidence, and all the authorities with which I am acquainted. I have always understood the law to be, that in order to determine a persons intention at a given time, you may regard number only companyduct and acts before and at the time, but also companyduct and acts after the time, assigning to such companyduct and acts their relative and proper weight of companyency. The law, I thought, was so well-established on that subject that I should number have thought it necessary to allude to this companytention, unless I had understood that the propriety of admitting this evidence was somewhat questioned by Lord Justice Fry, a view which I rather number gather from his judgment he has relinquished. We are, therefore, of opinion that. the companyduct and activities of Narain Raja subsequent to the year 1949 are relevant but we shall decide the question of his domicil in this case mainly in the light of his companyduct and activities prior to the year 1949. Reverting to the history of Narain Rajas life from 1950 onwards, it appears that he had married his wife in 1950. His wife belonged to Darkoti in Himachal Pradesh near Patiala. The marriage had taken place at Banaras. Narain Raja had a son and a daughter by that marriage and according to his evidence the daughter was born in Banaras and the son was born in Bettiah. The daughter prosecutes her studies in Dehradun. In 1950 or 1951 Narain Raja had established a Sanskrit Vidalya in Ramnagar in the name of his mother, called Prem Jananl Sanskrit Vidyalaya. The story of Narain Rajas political activities is as follows There was a Union Board in Ramnagar before Gram Panchayats had companye into existence, of which Narain Raja was the Chairman or President. 1 1889 40 Oh. D. 216. After Gram Panchayats were established, the Union Board was abolished. Narain Raja was a voter in the Gram Panchayat and he was elected as the Vice-President of the Union called D.C.M. Union of Ramnagar. For the General Elections held in 1952 Narain Raja was a voter from Ramnagar Constituency. In the General Election of 1957 he stood as a candidate opposing Kedar-Pandey. Thereafter, he became the President of the Bettiah Sub-divisional Swatantra Party and then Vice-President of Champaran District Swatantra Party. Taking all the events and circumstances of Narain Rajas life into account we are satisfied that long before the end of 1949 which is the material time under Art. 5 of the Constitution, Narain Raja had acquired a domicil of choice in India. In other words, Narain Raja had formed the deliberate intention of making his home with the intention of permanently establishing himself his family in India. In our opinion, the requisite animus manendi has been proved and the finding of the High Court is companyrect. On behalf of the appellant Mr. Aggarwala suggested that there were two reasons to show that Narain Raja had numberintention of making his domicil of choice in India. Reference was made, in this companytext, to Ex. 10 c which is a khatian prepared in 1960. showing certain properties standing in the name of Narain Raja and his brothers in Nepal. It was argued that Narain Raja had property in Nepal and so he companyld number have any intention of living in India permanently. It is said by the respondent that the total area of land mentioned in the khatian was about 43 bighas. The case of Narain Raja is that the property had belonged to his natural grandmother named Kanchhi Maiya who had gifted the land to Rama Raja. The land was the exclusive property of Rama Raja, and after his death, the property devolved upon his sons. The case of Narain Raja on this point is proved by a Sanad Ex. AA . In any event, we are number satisfied that the circumstance of Narain Raja owning the property companyered by Ex. 10 c can outweigh the fact that Narain Raja alone had extensive properties in India after the partition decree of the year 1944. It was also pointed out on behalf of the appellant that Narain Raja, and before him Rama Raja, had insisted upon designating themselves Sri 5, indicating that they belonged to the royal family of Nepal It was argued on behalf of the appellant that Narain Raja had clung tenaciously to the title of Sri 5, thereby indicating the intention of number relinquishing the claim to the throne of Nepal if at any future date succession to the throne falls to a junior member of the family of the King of Nepal. We do number think there is any substance in this argument. It is likely that Narain Raja and his father Rama Raja had prefixed the title of Sri 5 to their names owing to the pride of their ancestry and sentimental attachment to the traditional title and this circumstance has numberbearing on the question of domicil. Succession to throne of Nepal is governed by the rule of primogeniture and it cannot be believed that as the second son of his father, Narain Raja companyld ever hope to ascend to the throne of Nepal, and we think it is unreasonable to suggest that he described himself as Sri 5 with the intention of keeping alive his ties with Nepal. There was evidence in this ease that Narain Rajas eider brother Shiv Bikram Sah has left male issues. For the reasons expressed, we hold that Narain Raja had acquired domicil of choice in India when Art. 5 of the Constitution came into force. We have already referred to the finding of the High Court that Narain Raja was ordinarily resident in India for 5 years immediately preceding the time when Art. 5 of the Constitution came into force. It is manifest that the requirements of Art. 5 c of the Constitution are satisfied in this case and the High Court rightly reached the companyclusion that Narain Raja was a citizen of India at the relevant time.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 243 of 1965. Appeal by special leave from the judgment and order dated January 13, 1965 of the Madhya Pradesh High Court in Misc. Petition No. 624 of 1964. V. Gupte, Solicitor-General, and 1. N. Shroff, for the appellant. G. Ratnaparkhi, for the respondent No. 3. The Judgment of the Court was delivered by Ramaswami, J. This appeal raises an important question as to the scope and interpretation of s. 62 c of the Motor Vehicles Act and as to whether the appellant The Madhya Pradesh State Road Transport Corporation--was entitled, in the circumstances of the case, to the grant of a temporary permit for 4 months under s. 62 c of the Motor Vehicles Act. On November 27, 1962 applications were invited for a permit for running a town bus service in Raipur. On February 20, 1963 it was decided by the Regional Transport Authority to grant a permit for the service to the 3rd respondent--Madhya Pradesh Transport Co. Pvt. Ltd, Raipur--but the 3rd respondent did number produce buses of the required specifications for operating the service though several opportunities were given. The order granting the permit to the 3rd respondent was companysequently revoked by the Regional Transport Authority on September 13, 1964. Shortly thereafter the Regional Transport Authority granted a temporary -permit to the appellant for a period of two months i.e. from September 29, to November 28, 1964 in respect of the aforesaid bus service. By the order dated November 25, 1964 the Regional Transport Authority granted another temporary permit for 4 months to the appellant. The order of November 25, 1964 states From the large number of letters from some responsible members of the public received with this application and the statistics of the traffic catered to by the buses operated by the Corporation, it is number clear that the public of Raipur is feeling the need of the town bus operations. It has been decided by this Authority separately that applications for regular operations on two routes actually operated temporarily with some extensions and one additional route be invited. However, it has to be accepted that expectations of the public for these transport facilities at least on the existing two routes have been aroused and have created a particular need which has to be met temporarily till regular operations are introduced. The restrictions put by the first proviso to s. 62 of the Motor Vehicles Act and which has been emphasized in the decision of their Lordships of the M.P. High Court in Shri Ram Khanna v. Raingopal Satyanarain 1961 P.L.J. numberes 121 will number operate in sanctioning a further grant for a period of four months till nearly the end of March when the academic year may end for a large number of students availing of this facility. A temporary permit for a period of four months from the date of expiry, i.e., 28-11- 1964, on the routes and timings companyered by the previous order of ,grant dated 19-9-1964 is approved. This will stand cancelled if regular operations companyering these routes are introduced in the meantime. The 3rd respondent thereupon moved the High Court Of Madhya Pradesh on December 19, 1964 for grant of a writ of certiorari to quash the order of the Regional Transport Authority granting temporary permits to the appellant for operating the bus service. The application was allowed by the High Court on January 13, 1965 and a writ in the nature of certiorari was issued quashing the order of the Regional Transport Authority dated November 25, 1964 by which a temporary permit was granted to the appellant. The High Court took the view that a temporary permit cannot be granted for any route when there is a permanent need for providing transport facilities on that route and it has been decided to invite applications for that purpose. This appeal is brought, by special leave, by the Madhya Pradesh State Road Transport Corporation against the judgment of the High Court in the writ petition. Section 62 of the Motor Vehicles Act states A Regional Transport Authority may without following ,the procedure laid down in section 57, grant permits. to be ,effective for a limited period number in any case. to exceed four months, to authorise the use of a transport vehicle temporarily-- a for the companyveyance of passengers on special occasion such as to and from fairs and religious gatherings, or b for the purposes of a seasonal business, or c to meet a particular temporary need, or d pending decision on an application for the renewal of a permit and may attach to any such permit any companydition it thinks fit Provided that a temporary permit under this section shall, in numbercase, be granted in respect of any route or area specified in an application for the grant of a new permit under section 46 or section 54 during the pendency of the application Provided further that a temporary permit under this section shall, in numbercase, be granted more than once in respect of any route or area specified in an application for the renewal of a permit during the pendency of such application for renewal. On behalf of the appellant it was companytended, in the first place, that there was a particular temporary need for the provision of transport facilities and the High Court was erroneous in taking view that whenever there was a permanent need there companyld be numbertemporary need, and so temporary permit companyld number be granted under s. 62 c of the Motor Vehicles Act. In our opinion, the argument put forward by the learned Solicitor-General on behalf of the appellant is well-founded and must be accepted as companyrect. It appears from the order of the Regional Transport Authority that after the regular permit granted to respondent No. 3 was can-, celled there was a shortage of necessary number of transport vehicles on the route and the Regional Transport Authority thought it fit to provide for this temporary need until regular operations were introduced and regular permits were granted after following the procedure prescribed under s. 57 of the Motor Vehicles Act. Section 62 c of the Motor Vehicles Act states that the Regional Transport Authority may grant a temporary permit meet a particular temporary need and. we see numberreason why this clause should be given any special or restricted meaning. There is numberantithesis between a particular temporary need and a permanent need and it is manifest that these two kinds of need may companyxist on a particular route. If, therefore. the Regional Transport Authority companysidered that, in the circumstances of the case, there. was a particular temporary need, and granted a temporary permit to the appellant, the action of the Regional Transport Authority cannot be challenged as legally invalid. Reference may be made, in this companynection, to s. 62 d which companytemplates that temporary permits may be granted to authorise the use of a transport vehicle temporarily pending decision on an application for the renewal of a permit. This sub-section, therefore, companytemplates that there may exist a temporary need for transport facilities on a particular route even in case of permanent need for such facilities. We are accordingly of opinion that the Regional Transport Authority was right as a matter of law in granting a temporary permit to the appellant under s. 62 c of the Motor Vehicles Act in the circumstances of this case and the view expressed by the High Court is number companyrect. It was also companytended on behalf of respondent No. 3 by Mr. Ratnaparkhi that, in any event, the Regional Transport Authority ought number to have granted a temporary permit for a total period exceeding the limit of 4 months. Learned Counsel placed reliance the words in any case appearing in s. 62 of the Motor Vehicles Act which has already been quoted. It was urged that the words in any case mean that under numbercircumstances a temporary permit can be granted on any route for more than a total period of 4 months. We are of opinion that the words in any case do number mean in any circumstance. The section means that at any one time the Regional Transport Authority is number permitted to issue to any person a temporary permit for a period exceeding 4 months, but if the temporary need persists, as, for example, where the formalities under s. 57 are number companypleted within a period of 4 months, it would, in our opinion, be permissible for the Regional Transport Authority to grant a second temporary permit in order to meet the temporary need. We should, of companyrse, make it clear that the Regional Transport Authority cannot abuse its power and go on granting temporary permits in quick succession and number take speedy action for companypleting the procedure under s. 57 of -the Motor Vehicles Act. If upon the facts of any particular case it appears that the Regional Transport Authority is so abusing its powers its action is liable to be companyrected by grant of a writ, but where such abuse of power is number alleged or shown the mere fact that the Regional Transport Authority has granted a temporary permit for a second time and the total duration of the two periods is more than 4 months, would number invalidate the second permit. We accordingly reject the argument of learned Counsel for respondent No. 3 on this point. With regard to the companystruction of s. 62 c of the Motor Vehicles Act there is divergen of opinion among ,the various High Courts. In Jairam Dass v. Regional Transport Authority 1 I.L.R. 1956 Rajasthan 1053. it was held by the Rajasthan High Court that in a case where the Regional Transport Authority was of the view that the. existing regular bus service was number sufficient to meet the traffic and decided to increase the number of regular buses plying on the route, it had the power to grant a temporary permit till the necessary formalities for increasing the regular permits were gone through and that this would amount to a temporary need. The same view has been taken by the Assam High Court in Chandi Prasad Mahajan v. The Regional Transport Authority, Gauhati 1 in which it was said that s. 62 c of the Motor Vehicles Act is quite general in terms and is number restricted to an existing particular need but includes a particular temporary need created by the inability of government or an individual to provide transport immediately. A companytrary view has been expressed by Madras High Court in Sri Rama Vilas Service Ltd. v. The Road Traffic Board, Madras,C by Kerala High Court in Balagangadharan v. Regional Transport Board, Quiton, 3 by Nagpur High Court in Shah Transport Co., Chhindwara v. The State of Madhya Pradesh, 4 and by Mysore High Court in Mallasattappa v. The Chairman, Regional Transport Authority, Bangalore. 5 For the reasons already expressed, we hold that the view taken by the Rajasthan High Court in Jairam Dass v. Regional Transport Authority 6 and the Assam High Court in Chandi Prasad Mahajan v. The Regional Transport Authority, Gauhati 1 as to the interpretation and the effect of s. 62 c of the Motor Vehicles Act is companyrect. It was submitted on behalf of respondent No. 3 that the order of the Regional Transport Authority dated November 25, 1964 had already expired and the Regional Transport Authority had invited fresh applications for permanent permit by Gazette numberification dated December 14, 1964. It was companytended by Mr. Ratnaparkhi that any declaration that this Court may make with regard to the grant of temporary permit dated November 25, 1964 would be academic. But the Solicitor-General submitted on behalf of the appellant that it was necessary for this Court to declare the true position in law, so that in companysideration of fresh applications for a temporary permit in future numbermistake may be made. The view taken by the High Court in the judgment under appeal would bind the Regional Transport Authorities in the State unless it is set aside. We agree with the companytention of Solicitor- General and companysider that, in the circumstances of this case, the question is number totally academic. I.L.R. 1952 Assam 9. A.I.R. 1948 Madras 400. A.I.R. 1958 Kerala 144. A.I.R. 1952 Nagpur 353. A.I.R. 1959 Mysore 114. I.L.R. 1956 Rajasthan 1053. We accordingly allow this appeal and set aside the order passed. by the High Court dated, January 13. 1965 and declare that the order of the Regional Transport Authority dated November 25. 1964 granting a temporary permit to the appellant is legally valid.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 37 of 1965. Appeal by special leave from the judgment and order dated November 9, 1964 of the Patna High Court in Criminal Appeal No. 200 of 1964 and Death Reference No. 9 of 1964. K. Jain, for the appellant. P. Varma and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Bachawat, J. The appellant was charged under s. 302 of the Indian Penal Code for murdering his aunt, Ratni, her daugh- ter. Chamin, her son-in-law, Somra and Dilu, son of somra. He was companyvicted and sentenced to death by the Judicial Commis- sioner of Chotanagpur. The High Court of Patna accepted the death reference, companyfirmed the companyviction and sentence and dismissed the appeal preferred by the appellant. The appellant number appeals to this Court by special leave. The prosecution case is that on August 11, 1963 between 7 a.m. and 8 a.m. the appellant murdered Somra in a forest known as Dungijharan Hills and later Chamin in Kesari Garha field and then Ratni and Dilu in the house of Ratni at village Jamtoli. The first information of the offences was lodged by the appellant himself at police station Palkot on August 11, 1963 at 3-15 p.m. The information was reduced to writing by the officerin-charge, Sub-Inspector H. P. Choudhury, and the appellant affixed his left thumb-impression on the report. The Sub Inspector immediately took companynizance of the offence, and arrested the appellant. The next day, the Sub Inspector in the companypany of the appellant went to the house of Ratni, where the appellant pointed out the dead bodies of Ratni and Dilu and also a place in the orchard of Ratni companyered with bushes and grass, where he had companycealed a tangi. The appellant then took the Sub Inspector and witnesses to Kasiari garha khet and pointed out the dead body of Chamin lying in a ditch companyered with Ghanghu. The appellant then took the Sub Inspector and the witnesses to Dungijharan Hills, where he pointed out the dead body of Somra lying in the slope of the hills to the numberth. The Sub Inspector also recovered from the appellants house a chadar stained with human blood. The evidence of P.W. 6 shows that the appellant had gone to the forest on the morning of August 11, 1963. The medical evidence discloses incised wounds on all the dead bodies. The injuries were caused by a sharp-cutting weapon such as a tangi. All the four persons were brutally murdered. There is numbereye-witness to the murders. The principal evid- ence against the appellant companysists of the first information report, which companytains a full companyfession of guilt by the appellant. If this report is excluded, the other evidence on the record is insufficient to companyvict the appellant. The principal question in the appeal is whether the statement or any portion of it is admissible in evidence. The first information report reads as follows My name is Aghnu Nagesia. 1 My fathers name is Lodhi Nagesia. I am a resident of Lotwa, Tola Jamtoli, thana Palkot, district Ranchi. Today, Sunday, date number known, at about 3 p.m. I having companye to the P.S. make statement before you the S.I. of Police 2 that on account of my Barima aunt Mussammat having given away her property to her daughter and son-in-law quarrels and troubles have been occurring among us. My Barima has numberson and she is a widow. Hence on her death we shall be owners of her lands and properties and daughter and son-in- law of Barima shall have numberright to them. She lives separate from us, and lives in her house with her daughter and son-in-law and I live with my brother separately in my house. Our lands are separate from the time of our father. Today in the morning at about 7-8 a.m. I had -one with a tangi to Duni Jharan Pahar to cut shrubs for fencing. I found Somra sitting alone there who was grazing cattle there. 4 Seeing him I got enraged and dealt him a tangi blow on the fill calf of right leg, whereby he toppled down on the ground. Thereupon I dealt him several Chheo blows on the head and the face, with the result that he became speechless and died. At that time there was numbere near about on that Pahar. 5 Thereafter I came to the Kesari Garu field where Somras wife Chamin was weeding out grass in the field. 6 1 struck her also all on a sudden on the head with the said tangi whereby she dropped down on the ground and died then and there. 7 Thereafter I dragged her to an adjoining field and laid her in a ditch to the numberth of it and companyered her body with Gongu Pala ke Chhata so that people might number see her. There was numberperson then at that place also. 8 Thereafter I armed with that tangi went to the house of my Barima to kill her. When I reached there, I found that she was sitting near the hearth which was burning. 9 Reaching there all on a sudden I began to strike her on the head with tangi whereupon she dropped down dead at that very place. 10 Near her was Somras son aged about 3 -4 years. 11 I also struck him with the tangi. He also fell down and died. 12 I finished the line of my Barima so that numberone companyld take share in her properties. 13 1 hid the tangi in the jhari of my Barimas house. 14 Later on I narrated the occurrence to my chacha fathers brother Lerha that I killed the aforesaid four persons with tangi. After sometime 15 I started for the P.S. to lodge information and reaching the P.S. T make this statement before you. 16 My Barima had all along been quarrelling like a Murukh foolish woman and being vexed, I did so. All the dead bodies and the tangi would be lying in those places. I can point them out. 1 8 This is my statement. I got it read over to me and finding it companyrect, I affixed my left thumb-impression. We have divided the statement into 18 parts. Parts 1, 15 and 18 show that the appellant went to the police station to make the report. Parts 2 and 16 show his motive for the murders. Parts 3, 5, 8 and 10 disclose the movements and opportunities of the appellant before the murders. Part 8 also discloses his intention. Parts 4, 6, 9 and 11 disclose that the appellant killed the four persons. Part 12 discloses the killing and the motive. Parts 7, 13 and 17 disclose companycealment of a dead body and a tangi and his ability to point out places where the dead bodies and the tangi were lying. Part 14 discloses the previous companyfession by the appellant. Broadly speaking, the High Court admitted in evidence parts 1, 2, 3, 5, 7, 8, 10, 13, 15, 16, 17 and 18. On behalf of the appellant, it is companytended that the entire statement is a companyfession made to a police officer and is number provable against the appellant, having regard to S. 25 of the Indian Evidence Act, 1872. On behalf of the respondent, it is companytended that S. 25 protects only those portions of the statement which disclose the killings by the appellant and the rest of the statement is number protected by s. 25. Section 25 of the Evidence Act is one of the provisions of law dealing with companyfessions made by an accused. The law relating to companyfessions is to be found generally in ss. 24 to 30 of the Evidence Act and ss. 162 and 164 of the Code of Criminal Procedure, 1898. Sections 17 to 31 of the Evidence Act are to he found under the heading Admissions. Confession is a species of admission, and is dealt with in ss. 24 to 30. A companyfession or an admission is evidence against the maker of it, unless its admissibility is excluded by some provision of law. Section 24 excludes companyfessions caused by certain inducements, threats and promises. Section 25 provides No companyfession made to a police officer, shall be proved as against a person accused of an offence. The terms of s. 25 are imperative. A companyfession made to a police officer under any circumstances is number admissible in evidence against the accused. It companyers a companyfession made when he was free and number in police custody, as also a companyfession made before any investigation has begun. The expression accused of any offence companyers a person accused of an offence at the trial whether or number he was accused of the offence when he made the companyfession. Section 26 prohibits proof against any person of a companyfession made by him in the custody of a police officer, unless it is made in the immediate presence of a Magistrate. The partial ban imposed by S. 26 relates to a companyfession made to a person other than a police officer. Section 26 does number qualify the absolute ban imposed by s. 25 on a companyfession made to a police officer. Section 27 is in the form of a proviso, and partially lifts the ban imposed by ss. 24, 25 and 26. It provides that when any fact is deposed to as discovered in companysequence of information received from a person accused of any offence, in the custody of a police officer, so much of such information, whether it amounts to a companyfession or number, as relates distinctly to the fact thereby discovered, may be proved. Section 162 of the Code of Criminal Procedure forbids the use of any statement made by any person to a police officer in the companyrse of an investigation for any purpose at any enquiry or trial in respect of the offence Order investigation, save as mentioned in the proviso and in cases falling under sub-s 2 , and it specifically provides that numberhing in it shall be deemed to affect the provisions of S. 27 of the Evidence Act. The words of s. 162 are wide enough to include a companyfession made to a police officer in the companyrse of an investigation. A statement or companyfession made in the companyrse of an investigation may be recorded by a Magistrate under s. 164 of the Code of Criminal Procedure subject to the safeguards imposed by the section. Thus, except as provided by s. 27 of the Evidence Act, a companyfession by an accused to a police office- is absolutely protected under s. 25 of the Evidence Act, and if it is made in the companyrse of an investigation, it is also protected by s. 162 of the Code of Criminal Procedure, and a companyfession to any other person made by him while in the custody of a police officer is protected by S. 26, unless it is made in the immediate presence of a Magistrate. These provisions seem to proceed upon the view that companyfessions made by an accused to a police officer or made by him while he is in the custody of a police officer are number to be trusted, and should number be used in evidence against him. They are based upon grounds of public policy, and the fullest effect should be given to them. Section 154 of the Code of Criminal Procedure provides for the recording of the first information. The information report as such is number substantive evidence. It may be used to companyroborate the informant under s. 157 of the Evidence Act or to companytradict him under s. 145 of the Act, if the informant is called a,, a witness. If the first information is given by the accused himself, the fact of his giving the information is admissible against him as evidence of his companyduct under s. 8 of the Evidence Art. If the information is a number-confessional statement, it is admissible against the accused as an admission under s. 21 of the Evidence Act and is relevant, see Faddi v. The State of Madhya Pradesh 1 explaining Nisar Ali v. State of U.P. 1 and Dal Singh v. King Emperor 1 . But a companyfessional first information report to a police officer cannot be used against the accused in view of S. 25 of the Evidence Act. The Indian Evidence Act does number define companyfession. For a long time, the Courts in India adopted the definition of companyfession given in Art. 22 of Stephens Digest of the Law of Evidence. According to that definition, a companyfession is an admission made at any time by a person charged with crime, stating or suggesting the inference that he companymitted that crime. This definition was discarded by the Judicial Committee in Pakala Narayanaswami v. The King Emperor 4 . Lord Atkin observed numberstatement that companytains self- exculpatory matter can amount to companyfession, if the exculpatory statement is of some fact which if true would negative the offence alleged to be companyfessed. Moreover, a company- fession must either admit in terms the offence, or at any rate substantially all the facts which companystitute the offence. An admission of a gravely incriminating fact, even a companyclusively incriminating fact, is number of itself a companyfession, e.g., an admission that the accused is the owner of and was in recent possession of the knife or revolver which caused a death with numberexplanation of any other mans possession. These observations received the approval of this Court in Palvin. der Kaur v. The State of Punjab 5 . In State of P. v. Deoman Upadhyaya 6 , Shah, J. referred to a companyfession as a statement made by a person stating or suggesting the inference that he has companymitted a crime. Shortly put, a companyfession may be defined as an admission of the offence by a person charged with the offence. A statement which companytains self-exculpatory matter cannot amount to a companyfession, if the exculpatory statement is of some fact which, if true, would negative the offence alleged to be companyfessed. If an admission of an accused is to be used against him, the whole of it should be tendered in evidence, and if part of the admission is exculpatory and part inculpatory, the prosecution is number at Criminal Appeal No. 210 of 1963 decided on January 24, 1964 A.I.R. 1957 S.C. 366. L.R. 44 I.A. 137. 4 1939 L.R. 66 I.A. 66, 81. 5 1953 S.C.R. 94, 104. 6 1961 1 S.C.R. 14, 21. Sup.CI/65-10 liberty to use in evidence the inculpatory part only. See Hanumant v. State of U.P. 1 and Palvinder Kaur v. The State of Punjab 1 . The accused is entitled to insist that the entire ,admission including the exculpatory part must be tendered in evidence. But this principle is of numberassistance to the accused where numberpart of his statement is self-exculpatory, and the prosecution intends to use the whole of the statement against the accused. Now, a companyfession may companysist of several parts and may reveal number only the actual companymission of the crime but also the motive, the preparation, the opportunity, the provocation, the weapons used, the intention, the companycealment of the weapon and the subsequent companyduct of the accused. If the companyfession is tainted, the taint attaches to each part of it. It is number permissible in law to separate one part and to admit it in evidence as a number- companyfessional statement. Each part discloses some incriminating fact, i.e., some fact which by itself or along with other admitted or proved facts suggests the inference that the accused companymitted the crime, and though each part taken singly may number amount to a companyfession, each of them being part of a companyfessional statement partakes of the character of a companyfession. If a statement companytains an admission of an offence, number only that admission but also every other admission of an incriminating fact companytained in the statement is part of the companyfession. If proof of the companyfession is excluded by any provision of law such as s. 24, s. 25 and s. 26 of the Evidence Act, the entire companyfessional statement in all its parts including the admissions of minor incriminating facts must also be excluded, unless proof of it is permitted by some other section such as s. 27 of the Evidence Act. Little substance and companytent would be left in ss. 24, 25 and 26 if proof of admissions of incriminating facts in a companyfessional statement is permitted. Sometimes , a single sentence in a statement may number amount to a companyfession at all. Take a case of a person charged under s. 304-A of the Indian Penal Code and a statement made by him to a police officer that I was drunk I was driving a car at a speed of 80 miles per hour I companyld see A on the road at a distance of 80 yards I did number blow the horn I made numberattempt to stop the car the car knocked down A. No single sentence in this statement amounts to a companyfession, but the statement read as a whole amounts to a companyfession of an offence under s. 304-A of the Indian Penal Code, and it would number be permissible to 1 1952 S.C.R. 1091, 1111. 2 1953 S.C.R. 94,105-106. admit in evidence each sentence separately as a number- companyfessional statement. Again, take a case where a single sentence in a statement amounts to an admission of an offence. A states I struck B with a tangi and hurt him. In companysequence of the injury B died. A companymitted an offence and is chargeable under various sections of the Indian Penal Code. Unless he brings his case within one of the recognised exceptions, his statement amounts to an admission of an offence, but the other parts of the statement such as the motive, the preparation, the absence of provocation, companycealment of the weapon and the subsequent companyduct, all throw light upon the gravity of the offence and the intention and knowledge of the accused, and negatives the right of private defence, accident and other possible defenses. Each and every admission of an incriminating fact companytained in the companyfessional statement is part of the companyfession. If the companyfession is caused by an inducement, threat or pro- mise as companytemplated by s. 24 of the Evidence Act, the whole of the companyfession is excluded by s. 24. Proof of number only the admission of the offence but also the admission of every other incriminating fact such as the motive, the preparation and the subsequent companyduct is excluded by s. 24. To hold that the proof of the admission of other incriminating facts is number barred by s. 24 is to rob the section of its practical utility-and companytent. It may be suggested that the bar of S. 24 does number apply to the other admissions, but though receivable in evidence, they are of numberweight, as they were caused by inducement, threat or promise. According to- this suggestion, the other admissions are relevant but are of numbervalue. But we think that on a plain companystruction of s. 24, proof of all the admissions of incriminating facts companytained in a companyfessional statement is excluded by the section. Similarly, ss. 25 and 26 bar number only proof of admissions of an offence by an accused to a police officer or made by him while in the custody of a police officer but also admissions companytained in the companyfessional statement of all incriminating facts related to the offence. A little reflection will show that the expression companyfession in ss. 24 to 30 refers to the companyfessional statement as a whole including number only the admissions of the offence but also all other admissions of incriminating facts related to the offence. Section 27 partially lifts the ban imposed by ss. 24. 25 and 26 in respect of so much of the information whether it amounts to a companyfession or number, as relates distinctly to the fact discovered in companysequence of the information, if the other companyditions of the section are satisfied. Section 27 distinctly companytemplates that an information leading to a discovery may be a part of the companyfession of the accused and thus, fall within the purview of ss. 24, 25 and 26 Section 27 thus shows that a companyfessional statement admitting the offence may companytain additional information as part of the companyfession. Again, s. 30 permits the Court to take into companysideration against a companyaccused a companyfession of another accused affecting number only himself but the other companyaccused. Section 30 thus shows that matters affecting other persons may from part of the companyfession. If the first information report is given by the accused to a police officer and amounts to a companyfessional statement, proof of the companyfession is prohibited by s. 25. The companyfession includes number only the admission of the offence but all other admissions of incriminating facts related to the offence companytained in the companyfessional statement. No part of the companyfessional statement is receivable in evidence except to the extent that the ban of s. 25 is lifted by s. 27. Our attention is number drawn to any decision of this Court or of the Privy Council on the question whether apart from s. 27, a companyfessional first information report given by an accused is receivable in evidence against him. Decisions of the High Courts on this point are hopelessly companyflicting. They companytain all shades of opinion ranging from total exclusion of the companyfession to total inclusion of all admissions of incriminating facts except the actual companymission of the crime. In Harji v. Emperor 1 and Noor Muhammad v. Emperor 2 , the Lahore High Court held that the entire companyfessional first information report was inadmis- sible in evidence. In Emperor v. Harman Kisha 3 , the Bom- bay High Court held that the entire companyfessional report dealing with events on the night of the offence was hit by s. 25, and it companyld number be said that portions of it dealing with the motive and the opportunity were number parts of the companyfession. In King Emperor v. Kommoju Brahman 1 , the Patna High Court held that numberpart of the companyfessional first information report was receivable in evidence, the entire report formed a single companynected story and numberpart of it had any meaning or significance except in relation to the whole, and it would be wrong to extract parts of the statement and treat them as relevant. This case was followed A.I.R. 1918 Lah. 69. 2 1925 90 I.C. 148. 3 1935 I.L.R. 59 Dom. 120. I.L.R. 119401 Patna, 301, 308, 314. 14 3 in Adimoola Padayachi v. State 1 , and the Court admitted only the portion of the companyfessional first information report which showed it was given by the accused and investigation had started thereon. In State of Rajasthan v. Shiv Singh 2 the Court admitted in evidence the last part of the report dealing with the movements of the accused after the companymission of the offence, but excluded the other parts of the statement including those .relating to motive and opportunity. In Legal Remembrancer v. Lalit Mohan Singh Roy 3 , the Calcutta High Court admitted in evidence the narrative of the events prior to the night of the occurrence disclosing the motive of the offence. This case was followed by the Nagpur Court in Bharosa Ramdayal v. Empe- ror 4 . In Kartar Singh v. State 5 , the Court admitted in evidence the introductory part and the portion narrating the motive and the opportunity. In Ram Singh v. The State 6 , the Rajasthan High Court held that where it is possible to separate parts of the first information report by an accused from that in which he had made a companyfession, that part which can be so separated should be admitted in evidence, and on this view, admitted a part of the report relating to motive and subsequent companyduct including the statement that the accused had left the deceased lying wounded and breathing in the tibari and there was numberhope of her surviving and he had companye having companyered her with a cloth. In Lachrymose Mundane The State of Bihar 7 , the Patna High Court admitted in evidence portions of the first information report relating to the motive, the opportunity and the entire narrative of events before and after the crime. This case was followed in the judgment under appeal. Some of the decided cases took the view that if a part of the report is property severable from the strict companyfessional part, then the severable part companyld be tendered in evidence. We think that the separability test is misleading, and the entire companyfessional statement is hit by s. 25 and save and except as provided by s. 27 and save and except the formal part identifying the accused as the maker of the report, numberpart of it companyld be tendered in evidence. We think, therefore, that save and except parts 1, 15 and 18 identifying the appellant as the maker of the first information report and save and except the portions companying within the purview of s. 27, the entire first information report must be excluded from evidence. 1 1960 M.W.N. -28. 3 1922 I.L.R. 49 Cal. 167. A.I.R. 1952 Pepsu 98. A.I.R. 1962 Rajasthan 3. A.T.R. 1941 Nag. 86. 6 1952 I.L.R. 2 Rajasthan 93. A.I.R. 1964 Patna 210. Section 27 applies only to information received from a person accused of an offence in the custody of a police officer. Now, the Sub Inspector stated that he arrested the appellant after he gave the first information report leading to the discovery. Prima facie, therefore, the appellant was number in the custody of a police officer when he gave the report, unless it can be said that he was the in companystructive custody. On the question whether a person directly giving to a police officer information which may be used as evidence against him -may be deemed to have submitted himself to the custody of the police officer within the meaning of s. 27, there is companyflict of opinion. See the observations of Shah, J. and Subba Rao, J. in State of U.P. v. Deoman Upadhyaya 1 . For the purposes of the case, we shall assume that the appellant was companystructively in police custody and therefore the information companytained in the first information report leading to the discovery of the dead bodies and the tangi is admissible in evidence. The entire evidence against the appellant then companysists of the fact that the appellant gave information as to the place where the dead bodies were lying and as to the place where he companycealed the tan,-,, the discovery of the dead bodies and the tangi in companysequence of the information, the discovery of a blood-stained chadar from the appellants house and the fact that he had gone to Dungi Jharan Hills on the morning of August 11, 1963.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JUIUSDICTION Civil Appeal No. 131 of 1963. Appeal from the judgment and order dated April 29, 1963 -of the Madras High Court in Criminal Appeal No. 251 of 1963. C. Agarwala and P. C. Agarwala, for the appellant. Ranganadham Chetty and A. V. Rangam, for the respon- dent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by certificate granted under Art. 134 1 c of the Constitution from a judgment of the Madras High Court dated April 29, 1963 in Criminal Appeal No. 251 of 1963 affirming the companyviction of the appellant-Sri Mahant Kaushalya Das under s. 4 1 a of the Madras Prohibition Act and the sentence of one year Rigorous Imprisonment and a fine of Rs. 50 or in default rigorous im- prisonment for one month. The appellant is the hereditary Mahant of Sri Bairaghi Matam -a Hindu Religious and Charitable Institution of a monastic nature. The appellant has been residing in the Matam premises, Elephant Gate, Madras which is a public place of worship. On March 22, 1963 at about 10 a.m. the appellant was arrested by the police and immediately produced before the VIII Presidency Magistrate on the same day on a charge under s. 4 1 a of the Madras Prohibition Act on the allegation that he was in possession of 3,960 grams of Ganja companycealed in a wooden box in the Matam premises without any permit. The appellant pleaded guilty to the charge and upon that plea he was companyvicted by the Magistrate to rigorous imprisonment for one year and a fine Rs. 50, in default to rigorous imprisonment for one month. The appellant preferred Criminal Appeal No. 251 of 1963 to the High Court alleging that his eye-sight was very bad and defective, that he was an illiterate person, number acquainted with English or Tamil or with any other South Indian language and that he only knew Hindi as it was spoken in Uttar Pradesh. He .also companyplained that he had numbertime to companysult either his lawyer or his disciples, that the proceedings were rushed through with undue haste, that he did number really plead guilty to the charge and that he never understood the implications of the offence or the proceedings before the Magistrate. The appellant filed an affidavit in support of the appeal before the High Court in regard to these allegations. Kailasam, J. called for a report from the VIII Presidency Magistrate with regard to the allegations made in the affidavit of the appellant. On April 23, 1963 the Magistrate submitted a report as follows The particulars of the offence were explained to the accused by the Interpreter. It was translated to accused in Hindi by Sri M. Sukumara Rao, Bench Clerk of this Court who has passed examination in Hindi. The plea of guilty by the accused was also interpreted to the Court by Sri M. Sukumara Rao. The allegations companytained in the affidavit are false. Thereafter Kailasam, J. companyfirmed the companyviction and sentence and dismissed the appeal. Learned Counsel on behalf of the appellant put forward the argument that the Magistrate did number companyply with the mandatory provisions of S. 243. Criminal Procedure Code, that the appellant has been deprived of the substance of a fair trial, and that the companyviction of the appellant is legally invalid. it was also submitted on behalf of the appellant that the necessary ingredients of the offence of possession of the companytraband article under s. 4 1 a of the Madras Prohibition Act have number been established as a matter of law. It is necessary to reproduce, at this stage, the charge framed by the VIII Presidency Magistrate against the appellant as well as the judgment pronounced in the case. The charge reads as follows On 22nd March 1963 at about 8 a.m. at No. 1 General Muthiah Mudali street in C-2 limits, the accused was found in possession of 3,960 grams of Ganja companycealed in wooden box in his Matam premises without any permit. Hence the charge. The judgment by the Magistrate reads as follows Judgment, dated 22nd March 1964 -Accused produced. Pleads guilty. Found guilty. The quantity is very huge viz., 3,960 grams companycealed in a wooden box. I companyvict and sentence him to rigorous imprisonment for one year and to pay a fine of Rs. 50 in default 3 2 to rigorous imprisonment for one month. Confiscate property. Section 4 of the Madras Prohibition Act, 1937 Madras Act IO of 1937 as amended by Madras Act 8 of 1958 states 4. 1 Whoever- a imports, exports, transports or possesses liquor be or any intoxicating drug shall be punished -- in any other case with imprisonment for a term which may extend to one year and with fine which may extend to two thousand rupees, but in the absence of special and adequate reasons to the companytrary to be mentioned in the judgment of the Court, such imprisonment shall number be less than three months and such fine shall number be less than five hundred rupees, in the case of the offence of import, export or transport of liquor or any intoxicating drug falling under clause a It shall be presumed until the companytrary is shown- a that a person accused of any offence under clauses a to j of sub-section 1 has companymitted such offence in respect of any liquor or any intoxicating drug or any still, utensil, implement or apparatus whatsoever for the tapping of toddy or the manufacture of. liquor or any intoxicating drug or any such materials is are ordinarily used in the tapping of toddy or the manufacture of liquor or any intoxicating drug or any materials which have undergone any process towards the manufacture of liquor or any intoxicating drug or from which any liquor or intoxicating drug has been manufactured, for the possession of which he is unable to account satisfactorily, and It cannot be disputed in the present case that there has been a violation by the Magistrate of the requirements of s. 243 of the Criminal Procedure Code which states If the accused admits that he has companymitted the offence of which he is accused, his admission shall be recorded as nearly as possible in the words used by him and, if he shows numbersufficient cause why he should number be companyvicted, the Magistrate may companyvict him accordingly. It is stated by the Magistrate in his report that the particulars of the offence were explained to the appellant by the Bench Clerk Sri M. Sukumara Rao and that the plea of guilty by the appellant was interpreted to the Court by the same Bench Clerk. It is manifest from the record that theadmission of the appellant has number been recorded as nearly as possible in the words used by him, as required by s. 243 of the Criminal Procedure Code. It is true that in the judgment dated March 22, 1963 the Magistrate has said that the appellant pleads guilty, but the record companytains numberindication whatsoever as to what exactly the appellant admitted before the Magistrate. In our opinion, the requirements of s. 243 of the Criminal Procedure Code are mandatory in character and a violation of these provisions vitiates the trial and renders the companyviction legally invalid. The requirement of the section is number a mere empty formalitybut is a matter of substance intended to secure proper administration of justice. It is important that the terms of the section are strictly companyplied with because the right of appeal of the accused depends upon the circumstance whether lie pleaded guilty or number and it is for this reason that the legislature requires that the exact words used by the accused in his plea of guilty should, as nearly as possible, be recorded in his own language in order to prevent any mistake or misapprehension. It his been held by the Madras High Court in Queen-Empress v. Erugadu 1 that the violation of the procedure in s. 243 of the Criminal Procedure Code was sufficiently serious to invalidate the companyviction of the accused. The same view has been taken by the Calcutta High Court in Shailabala Dasee v. Emperor 2 and by the Allahabad High Court in Mukandi Lai v. Stale 3 . In our opinion, these cases companyrectly lay down the law on the point. It is submitted on behalf of the respondent that under s. 3 62 2 A , Criminal Procedure Code it was sufficient if the Magistrate made a memorandum of the substance of the exami- nation of the accused and that it was number necessary to record the actual words used by the accused. In our opinion, S. 362 2 A of the Criminal Procedure Code has numberapplication in a case I.L.R. 15 Mad. 83. 2 I.L.R. 62 Cal. 1127. A.I.R. 1952 Allahabad 212 where the accused pleads guilty and the special provision of s. 243 of the Criminal Procedure Code would be attracted in such a case. Section 243 of the Criminal Procedure Code is a provision of a special character and according to well- established rule of interpretation that special provision will take precedence and override the general provision of s. 362 2 A of the Criminal Procedure Code. We, therefore. reject the argument of Cousel for the respondent on this point.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 167 of 1963. Appeal by special leave from the judgment and order dated July 31, 1963, of the Judicial Commissioners Court Himachal Pradesh, in Criminal Appeal No. 7 of 1963. C. Agarwala, R. K. Garg and D. P. Singh, for the appellants. L. Hathi and B. R. G. K. Achar, for the respondent. The Judgment of the Court was delivered by Sarkar J. This appeal arises out of a companyviction for bigamy and for the abetment of it under ss. 194 and 109 of the Indian Penal Code. The trial Court acquitted the accused persons but on appeal the Judicial Commissioner of Himachal Pradesh companyvicted them. Hence this appeal. Originally four persons were charged, namely, Kubja the bride, Kanwal Ram the bride-room, Hira Nand and Seesia both relations of the bride, the latter two having been charged under s. 494 read with s. 109 for abetment of the offence of bigamy companymitted by the two first mentioned accused. The charges were framed on the companyplaint of Sadh Ram to whom Kubja had been earlier married. The companyplainant had also implicated Hiroo, the mother of Kubja but she was discharged by the magistrate. Hira Nand died pending the appeal in this Court. Sadh Ram was married to Kubja sometime in 1940-41. The marriage between the appellant Kanwal Ram and Kubja is said to have taken place in September 1955. By this time the Hindu Marriage Act, 1955 had companye into force and it prohibited the marriage of a Hindu during the lifetime of his or her spouse. The parties belong to a village in Himachal Pradesh among whom a customary form of marriage called Praina, is recognised. Both the marriages were performed according to that form. The marriage of Kubja with Sadh Ram though originally challenged is number accepted. The only question is whether the second marriage of Kubja, that is to say, between Kubja and Kanwal Ram, has been proved. The evidence would show that for a marriage in this form the following ceremonies are essential. First some agnatic relation of the bridegroom goes to the brides house and offers her suhag. Thereafter, a relation of the bride who is called Prainu, brings her to the house of the bridegroom. There at the door of the house of the bridegroom companyns are put in a pot and then Puja and Katha reading of holy scriputues are held. The, bride then nicks up the pot and takes that to the family hearth and bows there. Then she makes obeisance to the father-in-law and the mother-in-law and other elders in the family. Lastly, with feasting the ceremonies end. The companyplaint Sadh Ram himself admitted that puja at the entrance and bowing at the hearth by the bride after she had picked up the pot were companypulsory ceremonies. He added, If any one of these ceremonies is number performed, then the marriage is number companyplete. Now all that the only witness who spoke about the ceremonies observed at the marriage of Kubja and Kanwal Ram said was that Seesia had brought the suhag and Hira Nand acted as Prainu. He does number mention any of the other ceremonies to which we have earlier referred. It was companytended for the appellants that this evidence was number enough to show that the marriage of Kubja and Kanwal Ram can be said to have been performed. We think this companytention is justified. In Bhaurao Shankar Lokhande v. The State of Maharashtra 1 this Court held that a marriage is number proved unless the essential ceremonies required for its solemnisation are proved to have been performed. The evidence of the witness called to prove the marriage ceremonies, showed that the essential ceremonies had number been performed. So that evidence cannot justify the companyvic- tion. The trial Court also took the same view. The learned judicial Commissioner does number seem to have taken a different view. The learned Judicial Commissioner, however, thought that apart from the evidence about the marriage ceremonies earlier mentioned there was other evidence which would prove the second marriage. He first referred to a statement by the appellant Kanwal Rain that he had sexual relationship with Kubja. We are entirely unable to agree that this, even if true, would at all prove his marriage with Kubja. Then the learned Judicial Commissioner relied on a statement filed by Kubja, Hira Nand and Hiroo in answer to an application for restitution of companyjugal rights filed by Sadh Ram against Kubja and others, in which it was stated that Kubja married Kanwal Ram after her marriage with Sadh Ram had been dissolved. Now the statement admitting the second marriage by these persons is certainly number evidence of the marriage so far as Kanwal Ram and Seesia are companycerned they did number make it. Nor do we think, it is evidence of the marriage even against Kubja. First, treated as an admission, the entire document has to be read as a whole and that would prove the dissolution of the first marriage of Kubja which would make the second marriage innocent. Secondly, it is clear that in law such admission is number evidence of the fact of the second marriage having, taken place. In a bigamy case, the second marriage as a fact, that is to say, the ceremonies companystituting it, must be proved Empress v. Pitambur Singh 2 , Empress v. Kallu 3 , Archbold Criminal Pleading Evidence and Practice 35th ed. Art. 3796. In Kallus 3 case and in Morris v. Miller 4 it has been held that admission of marriage by the accused is number evidence of it for the purpose of proving marriage in an adultry or bigamy case see also Archbold Criminal Pleading Evidence and Practice 35th ed. Art. 3781. We are unable, 1 1965 2 S.C.R. 837. 2 1880 I.L.R. 5 Cal. 566. 3 1882 1.L.R. 5 All. 233. 4 4 Burr 2057 98 E.R. 73. therefore, to think that the written statement of Kubja affords any assistance towards proving her marriage with Kanwal Ram. Learned companynsel for the respondent state drew our attention to R. v. Robinson 1 in support of his companytention that it is number necessary to prove that all the ceremonies required for the particular form of marriage had been observed. We do number think the case supports that proposition. There the second marriage had been performed according to a Scottish custom observing all the necessary formalities. It appeared however that in order to be able to companytract a marriage in that form one of the parties to it had to reside in Scotland for twenty-one days which numbere of the parties to the second marriage in that case had done. It was, therefore, held that the marriage was number valid and the decision was that this invalidity of the marriage did number affect the liability for bigamy. It was said that the validity of the second marriage did number signify.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 202 and 203 of 1965. Appeals from the judgment and decree dated December 21, 1961 of the Madras High Court in O. S. Appeals Nos. 55 and 56 of 1959. K. Venugopal and R. Gopalakrishnan, for the appellant. V. Viswanatha Sastri, P. Ram Reddy and A. V. V. Nair, for respondent No. 1. The. Judgment of the Court was delivered by Bachawat, J. The appellant is a limited Company carrying on transport business in South Arcot District. M. A. Khader, the companytesting respondent in Civil Appeal No. 202 of 1965, holds 13 shares and his brother, M. A. Jabbar, the companytesting respondent in Civil Appeal No. 203 of 1965, holds 163 shares in the Company. Articles 29 and 30 of the Articles of Association of the Company read The numberice shall name a future day, number being less than seven days from the service of the numberice, on or before which such all or other money and all interest and expenses that may have accrued by reason of such number-payment are to be paid and the place where payment is to be made, the place so named being either registered office of the Company are usually made payable and shall state that in the event of number-payment at or before the time and at the place appointed the share in respect of which such payment is due, will be liable to be forfeited. If the requisition-, of any such numberice as aforesaid be number companyplied with, any share in respect of which such numberice has been given may, at any time thereafter before payment of all money due thereon with interest and expenses, be forfeited by a resolution of the Directors to that effect. On January 2, 1957, the board of directors of the Company passed a resolution calling the unpaid amount of Rs. 25/- on each share. On January 3, 1957, a call numberice was issued to the shareholders requesting payment on or before January 19, 1957. The call numberices were duly served on the companytesting respondents. As the call monies remained unpaid, the Company issued the 68 5 following numberice dated January 20, 1957 to the respondents under Art. 29 Sir, As the call amount of the balance of Rs. 25/- for every share held by you remains unpaid in respect of the numberice dated 3rd January 1957 issued in pursuance of the resolution of the Board, I hereby issue this numberice calling upon you to pay the called amount at the registered office of the Company on or before Wednesday the 30th January 1957, together with interest at six per cent and any expenses that might have accrued by reason of such number-payment. Take further numberice that in the event of number- payment as mentioned above, the shares registered in your name will be liable to be, once for all, forfeited without further numberice and without prejudice to any legal action that may be taken against you for recovering the balance amount due from you treating the same as a debt due to and recoverable as such by the Company under Article 14. By order of the Board Signed A. R. Hassain Khan Managing Director. In spite of this numberice, the respondents did number pay the call monies, and on February 11, 1957, the board of directors passed a resolution under Art. 30 forfeiting the shares held by them. On November 8, 1957, the respondents filed two separate applications under s. 155 of the Indian Companies Act, 1956 in the High Court of Madras praying that the forfeitures be set aside and the necessary rectifications be made in the share register of the Company. Ramachandra Ayyar, J. allowed the applications, and passed companyditional orders for rectification of the registers and his decision was affirmed by the appellate Court. The Courts below held that in the absence of Particulars of interest and expenses, the numberice dated January 20, 1957 was defective and the forfeiture is invalid. The Company number appeals to this Court by on a certificate granted by the High Court. In all standard articles of a companypany, the regulations relating to calls provide for payment of interest on the unpaid call money at a certain rate from the date appointed for its payment up to the time of actual payment, see regulation 14 of Table A in the first Schedule to the Indian Companies Act, 1913, regulation 16 of Tabie A in the first Schedule to the Indian Companies Act, 1956 and Palmers Company Precedents, 17th Edn., Part 1, p. 437 and the regulations relating to calls are followed by regulations relating to Forfeiture like Arts. 29 and 30 of the appellant Company. In the light of Art. 29 read with similar regulations relating to calls, we would have numberdifficulty in holding that the numberice dated January 20, 1957 required payment of Interest on tile call money from the date appointed for the payment thereof, that is to say, January 19, 1957 up to the time of the actual payment. Unfortunately, all the regulations of the Company relating to payment of calls have number been printed in the paper book, and in the present state of the record, we express numberopinion on the question whether the numberice is defective in respect of the demand for interest. But we agree with the High Court that the numberice is defective in respect of the demand for expenses. The amount of expenses incurred by the Company by reason of the number- payment was number disclosed. The respondents were number informed how much they should pay on account of the expenses. The object of the numberice under Art. 29 is to give the shareholder an opportunity for payment of the call money, interest and expenses. The numberice under Art. 30 must disclose to the shareholder presumably companyversant with the Articles sufficient information from which he may know with certainty the amount which he should pay in order to avoid the forfeiture. In the absence of particulars of the expenses, the respondents were number in a position to know the precise amount which they were required to pay on account of the expenses. A proper numberice under Art. 29 is a companydition precedent to forfeiture, under Art. 30. Here, the numberice under Art. 29 is defective, and the companydition precedent is number companyplied with. The slight defect in the numberice invalidates it and is fatal to the forfeiture. The Courts below, therefore, rightly declared that the forfeiture was invalid. Section 155 1 a ii of the Indian Companies Act allows rectification of the share register if the name of any person after having been entered in the register is, without sufficient cause, omitted therefrom. There is numbersufficient cause for the omission of the name of the shareholder from the register, where the omission is due to an invalid forfeiture of his shares, and on finding that the forfeiture is invalid, the Court has ample jurisdiction under s. 155 to order rectification of the register. me High Court said that the shareholder may approach the Court under s. 155 if be has sufficient cause. This mode of expression 68 7 was rightly criticised by companynsel for the appellant. The issue under s. 155 1 a ii is number whether the shareholder has sufficient cause but whether his name has been omitted from the register without sufficient cause. As the forfeiture is invalid, the names of the respondents were omitted from the share register without sufficient cause, and the jurisdiction of the Court under s. 155 is attracted. Counsel for the appellant companytended that the point as to the invalidity of the numberice dated January 20, 1957 was number open to the respondents in the absence of any pleading on this point. In the affidavit in support of the application, the respondents pleaded that the steps prescribed before there can be a forfeiture, have number been companyplied with. No further particulars were given, but the companytention as to the invalidity of the numberice dated January 20. 1957 was pointedly raised in the argument in the firs,. Court. Me companytention was allowed to be raised without objection. Had the objection been then raised, the Court might have allowed the respondents to file another affidavit. The appellant cannot number companyplain that the pleadings were vague. We may number companyveniently refer to certain events which happened after January 2, 1957 when the directors resolved to make the call and February 11, 1957 when the shares were forfeited. On January 18, 1957, M. A. Jabbar, M. A. Khadir and other shareholders filed Application No. 119 of 1957 in the Madras High Court praying for reliefs under ss. 402 and 237 of the Indian Companies Act, 1956, and obtained an interim order directing stay of companylection of monies pursuant to the numberice dated January 3. 1957. The stay order was companymunicated to the directors on January 21, 1957 after the numberice of the intended forfeiture dated January 20, 1957 was issued. On January 30, 1957, the Court passed a modified interim order restraining the forfeiture of the shares, and directed M. A. Jabbar to pay the call money into Court within one week. The call money was number paid into Court, and on February 8, 1957, the Court vacated the stay order. Application No. 119 of 1957 was eventually dismissed on April 10, 1957. Counsel for the appellant companytended that 1 by reason of the aforesaid proceedings the respondents waived and abandoned their right to challenge the forfeiture 2 the order dated January 30. 1957 substituted a fresh numberice of intended forfeiture under Art, 29 in lieu of the original numberice dated January 20, 1957 and in the absence of companypliance with this order, the forfeiture is valid. Neither of these companytentions was raised in the Court below. We find numberhing in the proceedings in Application No. 119 of 1957 from which we can infer a waiver or abandonment by the respondents of their right to challenge the validity of the numberice dated January 20, 1957 and the subsequent forfeiture. We also fail to see how the order of the Court dated January 30, 1957 can amount to a numberice under Art. 29. The only numberice under Art. 29 is the one dated January 20, 1957, and as that numberice is defective, the forfeiture is invalid. Counsel for the appellant companytended that the relief under s. 155 is discretionary, and the Court should have refused relief in the exercise of its discretion. Now, where by reason of its companyplexity or otherwise the matter can more companyveniently be decided in a suit, the Court may refuse relief under s. 155 and relegate the parties to a suit. But the point a, to the Invalidity of the numberice dated January 20, 1957 companyld well be decided summarily, and the Courts below rightly decided to give relief in the exercise of the discretionary jurisdiction under s. 155. Having found that the numberice was defective and the forfeiture was invalid, the Court companyld number arbitrarily refuse relief to the respondents. Counsel for the appellant points out that the respondents are the trade rivals of the appellant and are anxious to cripple its affairs, and the appellate Court recorded the finding that the respondents were acting mala fide and prejudicially to the interests of the appellant and their companyduct in taking various proceedings against the appellant is reprehensible. Counsel then relied upon the well-known maxim of equity that he who companyics into equity must companye with clean hands, and companytended that the Courts below should have dismissed the applications as the respondents did number companye with clean hands. This companytention must be rejected for several reasons. The respondents are number seeking equitable relief against forfeiture. They are asserting their legal right to the shares on the ground that the forfeiture is invalid, and they companytinue to be the legal owners of the shares. Secondly, the maxim does number mean that every improper companyduct of the applicant disentitles him to equitable relief. The maxim may be invoked where the companyduct companyplained of is unfair and unjust in relation to the subject-matter of the litigation and the equity sued for. The unwarranted proceedings under ss. 402 and 237 of the Indian Companies Act, 1956 and other vexatious proceed- ings started by the respondents have numberrelation to the invalidity of the forfeiture and the relief of rectification and are number valid Grounds for refusing relief. In the result, the appeals are dismissed.

Case appeal was rejected by the Supreme Court